IPCA rises 0.26% in September, driven again by gasoline

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The country now has an accumulated inflation of 5.19% in the 12-month window, leaving the target range pursued by the BC. Gasoline is the subitem that rose the most in 2023, with an accumulated increase of 16.18% in the year. Gasoline, fuel Reuters The Broad National Consumer Price Index (IPCA), considered the country’s official inflation, rose 0.26% in September, according to data released this Wednesday (11) by the Brazilian Institute of Geography and Statistics (IBGE ). The indicator accelerated again in relation to the previous month, driven this time by gasoline, which increased by 2.8% in September and contributed 0.14 percentage points to the general index. In August, the IPCA closed with an increase of 0.23%. In September 2022, the country had recorded deflation of 0.36%, in the wake of the fuel tax cuts. As a result, the country now has accumulated inflation of 5.19% in the 12-month window. In the year, it accumulates an increase of 3.5%. The result was below the expectations of the financial market, which expected an increase of 0.33% in the month. In 12 months, however, the indicator once again left the inflation target range pursued by the Central Bank. The target is 3.25%, with a tolerance between 1.75% and 4.75%. Six of the nine groups that make up the IPCA rose in the month, with emphasis on Transport (1.4%), which is home to the increase in fuel prices. In addition to gasoline, another relevant increase in the group comes from air tickets, which rose 13.47% in September. See the results of the IPCA groups: Food and beverages: -0.71%; Housing: 0.47%; Household items: -0.58%; Clothing: 0.38%; Transport: 1.40%; Health and personal care: 0.04%; Personal expenses: 0.45%; Education: 0.05%; Communication: -0.11%. Pressure on Transport Gasoline is the IPCA sub-item that rose the most in 2023, with an accumulated increase of 16.18% in the year. The variation in 12 months is 16.57%, which shows how the fuel has come under pressure since the turn of the year. This month, the increase in gasoline prices contributed to a 2.7% increase in the fuel item. Within the group, diesel is worth highlighting, which rose 10.11% in the month. Vehicle gas rose 0.66%, while ethanol registered a drop of 0.62%. Still in Transport, there is still volatility in air ticket prices. This month, there was an increase of 13.47% and a participation of 0.07 pp in the indicator, coming from a drop of 11.69% in the previous month. September inflation has an index below the market forecast and Miriam Leitão comments on expectations going forward Food and beverages falling The Food and beverages group recorded the biggest weight in September’s IPCA (21.1%), and had a drop of 0.71% in the month. It was the fourth consecutive deflation in the group’s prices, accumulating a reduction of 2.65% in the period. In general, we have a year with a large harvest that has contributed to greater availability of food on the market. This greater supply reduced the prices of important sub-items, such as meat and milk. What drives the group’s deflation results is the item Food at home, which includes fresh food items. Last month, the decline was 1.02%. But expanding the analysis and considering the four months of drop in the group’s prices, the item accumulated a decline of 4.01% in the period. Back to the month of September, IBGE highlights the declines in potatoes (-10.41%), onions (-8.08%), chicken eggs (-4.96%), long-life milk (-4.06%) and meat (-2.10%). What stops a sharper reduction in Food and beverages is the item Food away from home. In the month, the increase was 0.12%. Despite being a slowdown in relation to August (0.22%), in the four months in question, the group has accumulated an increase of 1.01%. “The increases in meals (0.13%) and snacks (0.09%) were less intense than those observed in August (0.18% and 0.30%, respectively)”, highlights the IBGE. Services and monitored One of the main areas looked at by the Central Bank (BC) when setting the basic interest rate, services inflation accelerated slightly in September. The increase in the month was 0.5% against 0.08% in August. Over the last 12 months, services inflation has accumulated 5.54%. In the previous measurement, it was 5.43%. The main influence for the acceleration came from airfares, which have been quite volatile month to month. Still, services are still well below the peak they recorded in July 2022, when they rose almost 9% in the 12-month window. With the increase in the general index, they even get closer to the rest of the basket and no longer detach from the aggregate results. What drew attention again were the monitored prices. These are items whose prices are defined by the public sector or by contracts. The increase for the month of September was 1.11%, against 1.26% in August. It turns out that the 12-month window started to accumulate an increase of 10.21% in the September measurement, against 7.69% in the previous month. The clearest influence, obviously, is gasoline. Of the more than 360 items measured by the IPCA, a portion suffers increases due to demand factors, but the dynamics of inflation have been greatly influenced by those monitored. Result below expectations The median financial market expectations pointed to an increase of 0.33% in September’s IPCA. The result was a surprise to the downside and brought good news about price behavior, according to analysts. “Despite services having accelerated in the month, the other items that make up the index showed a benign quality, with very low diffusion and the various core measures well-behaved”, says João Savignon, head of macroeconomic research at Kínitro Capital. “Thus, today’s data openings reinforce the recent dynamics of inflation in the country and the Central Bank’s flight plan in the cycle of interest cuts”, he continues. The diffusion index was 43%, the lowest since July 2017. This is the proportion of sub-items that had a positive change in the month. A smaller index means that fewer sub-items had positive changes and, therefore, the price increase is less spread out. Alex Agostini, chief economist at Austin Rating, highlights that the increase in Transport and Health and personal care (0.04%) came in below expectations, readjusting the agency’s inflation projections. The expectation is now 4.75% for the year, within the inflation target. “The important thing, and it was a very positive surprise, is that services had a very concentrated increase in air tickets. It is something specific and without concern. Industrial goods are still in negative territory, at 0.6%. And the diffusion was much lower than the average. In 2022, it reached 70%”, says the analyst. “Inflation has been losing strength and the BC’s strategy, still contractionary, allows it to continue converging towards the target”, he explains. The chief economist at B.Side Investimentos, Helena Veronese, also states that the results allow the BC to continue a dynamic of cuts of 0.50 percentage points in the basic interest rate. “The inflationary composition was very benign. Despite the external scenario being more complicated, the internal scenario continues to behave and allows the strategy to be maintained here”, says the economist. INPC increased by 0.11% in September The National Consumer Price Index (INPC) — which is used as a reference for adjustments to the minimum wage, as it calculates inflation for families with lower incomes — increased by 0.11% In September. In August, there was an increase of 0.20%. Thus, the INPC accumulates an increase of 2.91% in the year and 4.51% in the last 12 months. In September 2022, the rate was -0.32%. “Food products fell 0.74% after falling 0.91% in August. Prices of non-food products rose 0.38%, less than in the previous month, when the increase was 0.56%” , highlights the IBGE.

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