Inflation preview in May decelerates to 0.59% influenced by drop in electricity
May 24, 2022 09h00 AM | Last Updated: May 24, 2022 04h02 PM
The inflation preview decelerated to 0.59% in May and stood 1.14 percentage points (p.p.) below the April´s rate (1.73%). This index is the highest one for this indicator for May since 2016 (0.86%). In the year, the IPCA-15 accumulates a rise of 4.93%. The cumulative index in the last 12 months is 12.20%, above the rate of 12.03% registered in April, being the highest rate for this index since November 2003, when the cumulative rate had been 12.69%. In May 2021, the rate had been 0.44%. All the groups of products and services surveyed increased their prices, except for housing (-3.85%), influenced by the drop of 14.09% in electricity.
The highest rise came from Health and personal care (2.19%), which contributed with 0.27 p.p. to the May´s index. Pharmaceuticals was the item that mostly influenced the group and the IPCA-15 in May, recording an increase of 5.24% in their prices (and 0.17 p.p. of impact on the result), registered after the adjustment of up to 10.89% authorized by the Drug Market Regulation Chamber (CMED). Having risen 3.03%, the items of personal hygiene also pressed the result of this group, with an impact of 0.11 p.p. on the month´s index, the second biggest.
The major positive impact (0.40 p.p.) on the result of the IPCA-15 in May was the group of Transportation, which rose 1.80%. This result decelerated in relation to April (3.43%). The major contribution (0.09 p.p.) for this group came from the item airfare (18.40%), whose prices increased for the second consecutive month (in April, the rise was of 9.43%). Fuels (2.05%) also remain rising, though the change has been lower than that recorded in the previous month (7.54%). Increases in gasoline (1.24%) and ethanol (7.79%) stand out. Having accumulated a change of 18.24% in the year, vehicle insurance (3.48%) also stands out.
Still in Transportation, the sub-item taxi (5.94%) rose, due to the adjustments of 41.51% in the fare in São Paulo (20.15%) and of 14.10% in Fortaleza (12.95%). In Rio de Janeiro, the subway fare was adjusted by 12.07%, causing the sub-item subway to rise 2.17% at national level, whereas it stood at 6.56% in the metropolitan area. The sub-item urban bus (0.17%) was adjusted by 11.11% in Belém (4.17%).
Food and beverages was the other group that decelerated: 1.52% in May against 2.25% in April. Food for consumption at home (1.71%) exerted the major influence. Among the items that rose the most, long-life milk (7.99%) and potatoes (16.78%) impacted 0.06 p.p. and 0.04 p.p., respectively. Onions (14.87%) and French bread (3.84%) rose, whereas fruits (-2.47%), tomatoes (-11%) and carrots (-16.19%) dropped, the last one after a significant rise in April (15.02%).
Still in food products, the item food away from home accelerated between April (0.28%) and May (1.02%), mainly due to the sub-item snacks, which rose 1.89% against 0.07% in the previous month. Meals (0.52%) showed a result closer to that registered in April (0.45%).
The other changes ranged between 0.06% in Education and 1.86% in Wearing apparel.
The only drop in the prices among the groups was in Housing (-3.85%), pressed by electricity (-14.09%), which impacted -0.69 p.p. on the May´s IPCA-15. It should be reminded that the green tariff flag, which does not impose any additional charge on the electricity fare, came into force on April 16, after six months of the “water scarcity” flag, which charged R$14.20 at each 100 kWh consumed.
In regional terms, drops varied from 17.62% in Curitiba down to 2.18% in Fortaleza, where the fare was adjusted by 24.23%. A tariff adjustment of 20.97% was applied in Salvador (-4.82%) and of 18.77%, in Recife (-8.20%).
Still in the group of housing, piped gas increased 0.81%, as a result of the adjustment of 5.95% applied in Rio de Janeiro (2.58%). Water and sewage fees (0.55%) also rose, due to the adjustment of 12.89% in São Paulo (1.72%).
Concerning the regions, all the areas surveyed by the IPCA-15 in May rose, led by Fortaleza (1.29%), explained by the items of personal hygiene (3.59%) and by the adjustment of 24.23% in the electricity fare (-2.18%), which caused a lower reduction in the sub-item than that reported in other areas.
The lowest regional result was recorded in Curitiba (0.12%), where the retreat of nearly 18% in electricity (-17.62%) was followed by the drop in the prices of food, like carrots (-19.88%) and tomatoes (-13.72%).
More about the survey
The IPCA-15 differs from the IPCA, the official inflation in Brazil, only in the period of data collection and geographic coverage. In order to estimate the May´s index, prices were collected from April 14 to May 13, 2022 (reference) and compared with those in effect from March 17 to April 13, 2022 (base).
The target population of the IPCA-15 encompasses households with earnings between 1 and 40 minimum wages, whatever the source, living in the following metropolitan areas: Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Rio de Janeiro, São Paulo, Curitiba, Porto Alegre, as well as the Federal District and the municipality of Goiânia. Please take a look at the complete results at Sidra.