Inflation is 0.64% up in September and records highest index for the month since 2003

Section: Economic Statistics | Alerrandre Barros

October 09, 2020 09h00 AM | Last Updated: October 09, 2020 05h55 PM

Rice prices rose by almost 18% in September - Photo: Helena Pontes/IBGE News Agency

Inflation rose by 0.64% in September, pushed by rise of food and fuel prices, being above the rate of August (0.24%). That is the biggest result for a month of September since 2003, when the indicator was 0.78%. Data comes from the Extended National Consumer Price Index (IPCA), released today (9), by the IBGE.

The cumulative index in the year is 1.34%, and, in 12 months, 3.14%, above the 2.44% registered in the 12 previous month. In September 2019, the indicator had been -0.04%.

The biggest change (2.28%) and the main impact (0.46 p.p.) on IPCA came from food and beverages, which accelerated against the result of August (0.78%), mainly due to food at home (2.89%), with the rise of proces of soybean oil (27.54%) and rice (17.98%), which had cumulative increases of 51.30% and 40.69% in the year. Rice and soybean oil, together, accounted for a bigger impact (0.16 p.p) than meats (0.12 p.p), the change of which was 4.53%.

According to the survey manager, Pedro Kislanov, the rise of rice and oil prices is related to the high of dollar and the bigger domestic demand.

“Exchange at a higher level is an incentive to exports. The bigger the exports, the smaller the availability of products for the domestic market and, therefore, the higher the prices. Another factor is the high domestic demand, which, due to governmental age programs, such as the emergency aid, has helped keep prices high. In the case of soybean, there is also a strong demand from the biodiesel industry.”

Other products from the family basket recording higher prices are tomato (11.72%) and long-life milk (6.01%). On the other hand, the prices of onion (-11.80%), potato (-6.30%), garlic (-4.54%) and fruit (-1.59%) recorded decreases.

Besides food and beverages, six groups recorded increases in September, with a highlight to household articles (1.00%), transportation (0.70%) and housing (0.37%). Wearing apparel, after four straight months recording decreases, also rose by 0.37% and accounted for 0.02 percentage points of the September result.

“In transportation, fuels remain on an upward trend, mainly gasoline (1.95%), the prices of which rose in all the areas surveyed, except in Salvador. Gasoline is the most relevant subitem to IPCA. Airfares (6.39%) also rose after recording decreases for four months. It is worth mentioning that price data collection takes place two months in advance. Prices were collected in July to form the September index,” Mr. Kislanov highlights.

Among the groups recording fall of prices, the survey manager mentions groups that recorded fall of prices, with the major negative impact (-0.09 p.p) of health and personal care, which also had the lowest change (-0.64%) in September. “That was due to the decrease of 2.31% in health insurance planns. In August, the National Regulatory Agency for Private Health and Insurane Plans (ANS) decided to suspend price adjustments of healthcare for all types of insurance up to the end of 2020.”

The other groups ranged between the decrease of 0.09% in Education and the increase of 0.15% in Communication.

Prices rise in the 16 areas surveyed

In September, all the 16 areas surveyed by the IPCA recorded rise of prices. Campo Grande (1.26%) had the highest index teve o maior índice, mainly due to meats (6.63%), gasoline (2.69%) and electricity (3.41%). Other highlights were Fortaleza (1.22%), Rio Branco (1.19%), Goiânia (1.03%) and São Luís (1.00%).

The lowest result was that of the metroplitan area of Salvador (0.23%), mainly due to the fall of gasoline prices (-6.04%).

INPC records biggest increase in September since 1995

The National Consumer Price Index (INPC) rose by 0.87%, the highest figure for a month of September since 1995, when the index was 1.17%. In August, the indicator was 0.36%. INPC had a cumulative increase of 2.04% in the year and of 3.89% in the last twelve months. In September 2019, the rate was -0.05%.

The prices of food products rose 2.63% in September, whereas in the previous month it had been 0.80%.

The INPC refers to households with monthly income of 1 to 5 minimum wages, with a salaried head of the household. It encompasses ten metropolitan areas in Brazil, besides the municipalities of Goiânia, Campo Grande, Rio Branco, São Luís, Aracaju and Brasília. IPCA, in turn, encompasses households earning up to 40 minimum wages, whaterver the source.