January 11, 2019 | Last Updated: January 11, 2019 11:58:22 AM

IPCA

With lowest result in December within the Real Plan, inflation meets target and closes 2018 at 3.75%

Having recorded its lowest result in a month of December since 1994 (0.15%), inflation in 2018 stayed at 3.75%, within the target set by the federal government, 4.5% with a margin of 1.5 percentage points above or below. In spite fo that, the Extended Consumer Price Index (IPCA), released today by the IBGE, was abve the rate of 2017 (2.95%). 

The December inflation was driven, to a great extent, by the increases in Food and beverages (0.44%), Wearing apparel (1.14%) and Health and personal are (0.32%), which contributed ith 0.21 percentage points to the index. On the other hand, Transportation (-054%) and Housing (-0.15%) kept the index with a negative contribution of 0.12 percentage points. 

The most influential group was Food and beverages, with an increase in important products such as potato (20.0%) and onion (24%). Fernando Gonçalves, manager of the survey, explains that the decrease in Housing resulted mainly from the contribution of electricity, which got about 2% cheaper after the change of tariff flag. “In Transportation, the highlight was fuels, gasoline, mainly, which fell by almost 5% and accounted for the main negative impact 0.22 percentage points. Airfare accounted for the main positive individual contribution”, says the mananger.

In the year, however, the main driving forces of inflation were the groups Food and beverages, with 4.04% of increase and 0.99 percentage points of impact on the index; Transportation, with 4.19% and 0.76 percentage points, and Housing, 4.72% and 0.74 percentage points. Whereas Food and beverages influenced the inflation figure in December, the other two groups closed the year with falling results. 

“The biggest changes in the year were those of Housing and Transportation, besides Education, with a highlight to regular courses, with 5.68%. In Housing, electricity accounted for the major impact, and in Transportion, airfares, gasoline and urban bus did”, explains Fernando.

The group Food and beverages had closed 2017 with fall of prices (-1.87%) due to the record harvest of national agriculture. In 2018, however, it was responsible for the main contribution (0.99 percentage points) to the general index, affected by the reduced harvest and by the truch drivers strike that led to a 2.03% increase in June (the biggest one in that group for a month of December since 1994).

“Food and beverages accounted for the biggest impact in the year due to its great relevance to family expenses. The main influence in this group came from food at home, especially tomato, with a change of 71.76% and fruits, with 14.10%”, Fernando adds.

The National Consumer Price Index (INPC), which deals with the basket of products of households with income ranging from one to five salaries, was also 0.14% in December and closed the year at 3.43%. The indicator was also influenced by Food and beverages, with an increase of 3.82% in the year, and a contribution of 1.15 percentage points.


Reporter: Rodrigo Paradella
Image: Luiz Agner