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Inflation stands at 0.12% in July, after defaltion in the previous month

Section: Economic Statistics | Irene Gomes

August 11, 2023 09h00 AM | Last Updated: August 14, 2023 01h03 PM

With gasoline's rise, July inflation returns to positive - Photo: Licia Rubinstein/Agência IBGE Notícias

The official inflation for the month of July was 0.12%, 0.20 percentage points (pp) above the rate of -0.08% registered in June. In the year, the IPCA accumulates an increase of 2.99% and, in the last 12 months, of 3.99%, above the 3.16% observed in the previous 12 months. In July 2022, the change had been -0.68%.

Of the nine groups of products and services surveyed, five increased in July. The Transportation group had the greatest impact (0.31 pp) and the greatest change (1.50%). On the downside, Housing (-1.01% and -0.16 pp) and Food and beverages (-0.46% and -0.10 pp) stand out.

The results of the other groups were: -0.24% for Wearing apparel; 0.00% for Communication; 0.04% for Household items; 0.13% for Education; 0.26% for Health and personal care and 0.38% for Personal expenses.

Gasoline, the subitem with the highest individual weight in the index (4.79%), was the product that most impacted the July result, with a change of 4.75% and a contribution of 0.23 pp. In June, it had fallen of 1.14%. “Last month, reductions were applied at refineries. The increase in July captures the tax reencumbrance, with the return of the full rate of PIS/COFINS”, explains André Almeida, survey manager.

In relation to other fuels (4.15%), increases were registered in vehicle gas (3.84%) and ethanol (1.57%), while diesel fuel fell by 1.37%. Increases in airfare (4.97%) and new cars (1.65%) also contributed to the group's result.

On the side of falls, in the Housing group (-1.01%), residential electricity (-3.89%) had the most intense negative impact of the month (-0.16 p.p.). “The result was due to the incorporation of the Itaipu Bonus, fully credited in invoices issued in July”, explains Mr. Almeida.

The fall in the group Food and beverages (-0.46%) was mainly influenced by the decline in prices of food at home (-0.72%), which had already presented a negative result in June (-1.07% ). Among the products, the highlights are carioca beans (-9.24%), soybean oil (-4.77%), chicken pieces (-2.64%), meat (-2.14%) and milk long life (-1.86%). “In general, we can say that these drops are related to a greater supply of products”, highlighted Mr. Almeida.

Eating away from home (0.21%) decelerated in relation to the previous month (0.46%) due to less intense rises in snacks (0.49%) and meals (0.15%). In June, the changes in these subitems had been 0.68% and 0.35%, respectively.

In the cumulative rate from January to July 2023 (2.99%), the subitem with the greatest impact was gasoline, with a change of 11.64% and a contribution of 0.54 pp. Among food products, the greatest impact in the year came from food away from home, with a change of 3.63% and a contribution of 0.21 pp. Also noteworthy is the increase in long-life milk, with a change of 7.13% and an impact of 0.06 pp. On the other hand, meat ( -7.9% and -0.23 pp), onions (-42.42% and -0.11 pp) and soybean oil (-28.12% and -0.09 pp) had the main drops in 2023.

Regarding the cumulative index in the last 12 months, which accelerated from 3.16% in June to 3.99% in July, Mr. Almeida stresses the three consecutive deflations observed in July, August and September 2022: “the fall of -0.68% of July 2022 got out and the high of 0.12% of July 2023 got in”, he explains.

Regionally, thirteen of the sixteen areas surveyed registered increases in July. The biggest change was in Porto Alegre (0.53%), due to the rise in gasoline prices (6.98%). The smallest one was in Belo Horizonte (-0.16%), influenced by the 17.50% decreases in urban buses and 4.30% in residential electricity.

INPC drops -0.09% in July

Also released today was the National Consumer Price Index (INPC), which fell by 0.09% in July, a change close to that recorded in the previous month (-0.10%). In the year, the INPC accumulates a high of 2.59% and, in the last 12 months, of 3.53%, above the 3.00% observed in the previous 12 months. In July 2022, the rate was -0.60%.

Food products fell by 0.59% in July, after falling by 0.66% in June and non-food products fell by 0.07%, close to the result of 0.08% observed in June.

By area, eight areas registered decrease in July, with the lowest result in Belo Horizonte (-0.48%) and the highest, in Belém (0.39%).

More about the surveys

The IPCA covers families with incomes of 1 to 40 minimum wages, while the INPC, families with incomes of 1 to 5 minimum wages, residing in the Metropolitan Areas of Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Vitória, Rio de Janeiro, São Paulo, Curitiba, Porto Alegre, in addition to the Federal District and the municipalities of Goiânia, Campo Grande, Rio Branco, São Luís and Aracaju. Please access the data on Sidra database. The next IPCA result, referring to June, will be released on September 12th.

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