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Inflation accelerates to 0.46% in May, leveraged by rise in food

Section: Economic Statistics | Umberlândia Cabral

June 11, 2024 09h00 AM | Last Updated: June 12, 2024 02h40 PM

Having increased 20.61%, potatoes was the item with the biggest individual impact on the Brazilian inflation in May - Picture: IBGE Archive

The Brazilian inflation was 0.46% in May, accelerating in relation to the previous month (0.38%). The result was pressed by the prices of food and beverages, which rose 0.62% compared with April, influenced by the rise in tubers, roots and legumes (6.33%). Among them, potatoes stood out with an increase of 20.61%, the biggest individual impact on the overall index.

The cumulative inflation in the year is 2.27% and, in the last 12months, 3.93%. The data are from the Extended National Consumer Price Index (IPCA), released today (11) by the IBGE.

André Almeida, manager of the survey, notes that the change in the harvests is one of factor related to the increase in that tuber. With the end of the rainy season and beginning of the winter season in May, the supply of potatoes reduced. Moreover, part of the production was affected by the heavy rains that hit Rio Grande do Sul, one of the major producing regions," says him.

In addition to potatoes, other important food in the diet of Brazilians also rose in May, highlighted by onions (7.94%), long-life milk (5.36%) and ground coffee (3.42%). Milk is in the off-season period and had its imports reduced. This combination resulted in a smaller supply. Concerning coffee, the prices of the two species have been increasing in the foreign market, which explains the May´s result," highlights the researcher.

Even with these rises, the price of food at home (0.66%) decelerated over April (0.81%). Such behavior is explained by the negative changes in some food, like fruits (-2.73%). "The major food that dropped in May was banana: the higher supply of dwarf bananas pressed the prices of fruit-bananas, downsizing both. It helped to hold the increase in food at home," analyzes Almeida.

On the other hand, the prices of food away from home (0.50%) rose more than in the previous month (0.39%), influenced by the acceleration of snacks (from 0.44% to 0.78%). In contrast, the change in meals (0.36%) stayed close to that recorded in April (0.34%).

Beyond food and beverages, the group that mostly influenced the overall result was that of housing (0.67%), with the rise of residential electricity (0.84%), the third biggest individual impact on the overall result. The result is explained by the application of fare adjustments in Salvador (BA), Belo Horizonte (MG), Campo Grande (MS), Recife (PE), Fortaleza (CE) and Aracaju (SE). Water and sewage fees (1.62%) and piped gas (0.30%) contributed to the rise of this group as well.

The change in health and personal care (0.69%) was the second higher among the nine groups investigated by the survey. The result was influenced by the increase in the prices of health insurance plans (0.77%) and of items of personal hygiene (1.04%), highlighted by perfume (2.59%) and skin products (2.26%). "May is marked by the Mothers Day, which contrbuted to the increase in the prices of perfumes, make-up articles and skin products," assesses the manager.

In the group of transportation (0.44%), airfare registered the first rise in the year (5.91%) and it was the fourth individual item with the biggest impact on the Brazilian inflation. Deflation in this item was 12.09% in April. In addition, fuels (0.45%), impacted by ethanol (0.53%), diesel fuel (0.51%) and gasoline (0.45%), rose in May. The prices of subway (1.21%) and taxi (0.55%) rose as well.

Inflation reaches 0.87% in Porto Alegre.

In face of the the environmental disaster that hit Rio Grande do Sul in the end of April, Porto Alegre was the area investigated by the survey with the highest change in the May´s IPCA. "The calamity managed to affect the rise of the prices of some products and services. In May, the major rises were of potatoes (23.94%), bottled gas (7.39%) and gasoline (1.80%)," highlights Almeida.

Of the 16 places surveyed, only Goiânia (-0.06%) reported a deflation. This result was related to the retreat in the prices of gasoline (-3.61%) and etahnol (-6.57%) in that municipality.

INPC rises 0.46% in May

The rise of the National Consumer Price Index (INPC) was of 0.46% in May, also accelerating in relation to the previous figure. The result was impacted by food products, which rose 0.64% in May, after rising 0.57% in April. The prices of non-food products changed 0.40%, above that registered in the previous month (0.31%).

"In May, the result of the INPC was the same as that of the IPCA, as well as the behavior of the groups. That of food products had a bigger impact [on the INPC] due to the higher weight of this group in the budget of lower-income families," highlights Almeida. The overall index accumulates an increase of 2.42% in the year and of 3.34% in the last 12 months.

Among the areas included in the survey, the highest change also occurred in Porto Alegre (0.95%), linked, as in the IPCA, with the rises of potatoes (23.94%), bottled gas (7.39%) and gasoline (1.80%).

IPCA/INPC data collection in Rio Grande do Sul

Due to the public disaster in the metropolitan area of Porto Alegre, an area included in the survey, remote price collection was improved and on-site collection remained whenever possible. The percentage collected remotely, either through telephone or Internet, which was around 20%, changed to nearly 65% due to the extraordinary situation noticed in May.

In order to estimate the IPCA/INPC, prices were collected from May 1 to May 29, 2024 (reference) and compared with those in effect from March 29 to April 30, 2024 (base). The information applicable to the May´s IPCA/INPC were validated based on the methodologies of price calculation, edition and imputation in force in the National System of Consumer Price Indexes (SNIPC).

Not all sub-items could be collected through telephone or Internet, as the case of some sub-items of the item "green vegetables." In the case of missing prices, data were imputed, a procedure described in the publication ""National System of Consumer Price Indexes: Calculation method - 8th edition", available on liv101767.pdf". In the case of sub-item "toll", toll stations in which charging was suspended during the reference period of the survey were not considered. Those that charged for some days in the reference month were pro rata collected, i.e., they were proportionally distributed along the reference period in the calculation of the inflation of this sub-item.

The Revision Policy of Data Released by IBGE Statistical Operations establishes that price indexes used as inflation indexers for the monetary adjustment of both public and private contracts are not revised to guarantee the legal security of the contracts. Included in this context are the data from the National Consumer Price Index (INPC), Extended National Consumer Price Index (IPCA), Extended National Consumer Price Index-15 (IPCA-15) and Special Extended National Consumer Price Index (IPCA-E). Access here the document "Revision Policy of Data Released by IBGE Statistical Operations."

More about the surveys

The IPCA encompasses households with earnings between 1 and 40 minimum wages, whereas the INPC, households with earnings between 1 and 5 minimum wages, living in the Metropolitan Areas of Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Vitória, Rio de Janeiro, São Paulo, Curitiba, Porto Alegre, as well as in the Federal District and in the municipalities of Goiânia, Campo Grande, Rio Branco, São Luís and Aracaju. Access the data on Sidra. The next result of the IPCA, related to June, will be released on July 10.

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