IPCA: Inflation accelerates in February to 0.83% – 03/12/2024 – Market

Brazil’s official inflation, measured by the IPCA (Broad Consumer Price Index), accelerated in February to 0.83%, according to data from IBGE (Brazilian Institute of Geography and Statistics) released this Tuesday (12).

The data was above the median of projections raised by Bloomberg. The market consensus was for inflation at 0.79%.

In January, the IPCA registered an increase of 0.42%. In the first month of the year, consumer prices surprised the market and were driven by the rise in food and beverage prices, impacted by the effects of the El Niño climate phenomenon.

With the new February result, Brazilian inflation accumulated an increase of 4.5% in the last 12 months, above the 4.44% projected by the market.

For this year, the center of the inflation target pursued by the BC (Central Bank) in its interest rate decisions is 3%. The tolerance is 1.5 percentage points more or less. In other words, the target will be met if the IPCA stays in the range of 1.5% (floor) to 4.5% (ceiling).

According to the latest edition of the Central Bank’s Focus bulletin, which brings together expert projections for the main indicators of the Brazilian economy, the IPCA should close 2024 at 3.76%. The forecast is below the target ceiling.