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June's inflation stays at 0.01%, the lowest rate of the year

Section: Economic Statistics | Pedro Renaux

July 10, 2019 09h00 AM | Last Updated: July 10, 2019 10h49 AM

Decrease in fruit prices contributes to deflation of 0.25% in food in June - Photo: Luiz Agner/IBGE

The Extended National Consumer Price Index (IPCA), which measures the official inflation in the country, was 0.01% in June, the lowest rate for 2019. The index accumulated a high of 2.23% in the year and 3.37% in the last 12 months, below the target of 4.25% set for 2019.

Lower inflation was driven by transportation and food prices, which fell by 0.31% and 0.25%, respectively, compared with May. "The two groups helped retain prices in June. They weigh 43%, almost half of the IPCA, " explains the IBGE Price Index manager, Fernando Gonçalves.


Deflation in transportation came from falling fuel prices, particularly gasoline, which fell by 2.04%. Both diesel oil and ethanol were cheaper, -0.83% and -5.08%, respectively. Ethanol retreated in all areas surveyed.

On the positive side, the most intense impacts in the transportation group came from airfare, which increased by 18.90%, and urban buses, with a high of 0.39%.

"This increase in airfares was due to the June holidays and the Copa America. There was also a lower base in May, with a reduction of approximately 20% in price," Gonçalves says.

In food, this is the second negative result in a row, due to the reduction in the prices of fruits and carioca beans, which accumulated three consecutive drops. The group also had increases of 5.25% in tomatoes and of 0.47% in meat. In the first half of the year, food prices accumulated growth of 2.89%.

According to Gonçalves, the greater supply and the reduction in the consumption of fruits and vegetables in the winter help explain the food deflation in the month. "Depending on the type of fruit, people end up consuming less at this time of year. Orange crops, for instance, are in a good moment, so their prices tend to fall. "

On the other hand, the health and personal care group, with a high of 0.64%, had the largest change and the highest individual impact on June's inflation. "This change was due to personal hygiene products, such as perfumes and makeup," explains the IPCA manager.

The housing group decelerated by 0.07% in June, especially due to electricity, which fell by 1.11%. This is due to the entry into force of the green tariff in June, without additional charges for consumers.

"Electricity helped refrain the housing group," says Gonçalves, highlighting that piped gas rose 7.33%, leveraged by increased fees in São Paulo.

Keywords: Inflação, IPCA, Junho, Transporte, Alimentos.

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