The Extended National Consumer Price Index – IPCA changed 0.78% in May and surpassed the April index (0.61%) by 0.17 percentage points (p.p.). This was the highest rate for May since 2008 (0.79%). As a result, the cumulative index in the year (4.05%) was below the rate of 5.34% registered in the same period in 2015.  The cumulative rate in the last 12 months (9.32%) stood slightly above the rate of 9.28% relative to the 12 immediately previous months. In May 2015, the IPCA stayed at 0.74%.

The complete publication of the IPCA can be found here.

Having risen 10,37%, water and sewage fees from the group of Housing (1.79%) stood out, becoming the biggest individual contribution in May (0.15 p.p.). This was due to the pressure exerted by the metropolitan area of São Paulo, in which the change of this item hit 41.90%. It reflected the end of the Program for Reduction of Water Consumption, discontinued by Resolution no. 641 of the Regulatory Agency of Sanitation and Energy of the State of São Paulo – ARSESP on March 30, 2016. Besides the end of the bonus for reducing and the onus for those increasing the consumption of water practiced by this Program, an adjustment of 8.40% over the fees came into effect on May 12.

The water and sewage fees also incorporated adjustments in the metropolitan areas of Fortaleza (9.30%), reflecting part of the adjustment of 11.96% in force since April 23; of Belo Horizonte (7.72%), reflecting part of the adjustment of 13.90% in force since May 13, in addition to the fare revision practiced by the water supply company in this area; and of Curitiba (0.33%), reflecting a small part of the adjustment of 10.48% in force since April 1st.

Still in the group of Housing, other important items exerted pressure on the IPCA in May: electricity (2.28%), manpower for small repairs (0.87%), cleaning products (0.85%) and condominium fees (0.79%).

Concerning electricity (2.28%), the pressures were exerted by the following metropolitan areas: Salvador (11.25%), with the adjustment of 10.72% on April 22 coupled with the increase in PIS/COFINS; Recife (11.22%), due to the adjustment of 11.66% on April 29; Fortaleza (6.41%), reflecting the adjustment of 12.97%, coupled with the reduction of 8.40% in the Street Lighting Contribution – CIP, both of them in force since April 22; Belo Horizonte (3.24%), whose adjustment of 3.78% came into effect on May 28, in addition to the increase in PIS/COFINS. In Campo Grande, the item electricity (0.64%) also incorporated part of the adjustment of 7.40% and the adjustment of the Street Lighting Contribution in force since April 8, in addition to the reduction in PIS/COFINS.  In other areas surveyed, like São Paulo (2.02%) and Porto Alegre (-1.08%), the electricity bills became either more expensive or cheaper depending on the changes in PIS/COFINS.

Mainly under the influence of water and sewage fees (1.79%) and electricity (2.28%), the group of Housing (1.79%) led both the group changes and the contributions (0.27 p.p.), as shown in the following table.

Health and Personal Care (1.62%) strongly changed, coming immediately after the group of Housing (1.79%). Having increased 6.26% in April, the prices of medicines increased more 3.10% in May. As a result, the increases in these two months added up to 9.55%, reflecting the adjustment of 12.50% in force since April 1st.

In the group of Health (1.62%), the highlights in terms of significant price increases were personal hygiene products (1.17%), health insurance (1.06%) and medical and dental services (0.91%).

Having risen 9.33%, cigarettes stood out in Personal Expenses (1.35%), reflecting adjustments between 3% and 14%, depending on the brand, in force since May 1st. The items domestic workers (0.87%) and manicurist (0.64%) also stood out.

Although lower than in April (1.09%), the prices in the group of Food and Beverages (0.78%) remained rising. A number of products rose significantly, like potatoes, which became 19.12% more expensive between April and May and posted a cumulative rise of 50.91% this year. The major increasing food products are as follows:

On the other hand, important food products in the expenditure of the households dropped from one month to the other, as shown in the following table.

Among the other groups of products and services surveyed, the rising highlights were: TV, sound and computers (2.57%), bed, bath and table articles (1.89%), men’s wearing apparel (1.88%), children´s wear (0.97%), new car (0.80%), vehicle licensing (0.77%), women’s wearing apparel (0.76%), motorcycle (0.72%), used cars (0.60%), car repair (0.59%) and household appliances (0.48%).

On the side of the drops, the following items stood out: ethanol (-9.54%), airfare (-8.22%), excursion (-1.28%), hotel (-0.98%), gasoline (-0.85%), bottled gas (-0.74%) and furniture (-0.42%).

The highest regional index was registered in Fortaleza (0.99 %), pressed by water and sewage fees (9.30%), which reflected the adjustment of 11.96% on April 23, and by electricity (6.41%), considering the adjustment of 12.97% in the fare in force since April 22, coupled with the drop of 8.40% in the Street Lighting Contribution – CIP. The lowest index was recorded in Goiânia (0.28%). See below the table of monthly results by area surveyed.

In order to estimate the index of the month, the prices collected from April 29 to May 30, 2016 (reference) were compared with the prices in force from March 31 to April 28, 2016 (base).

The IPCA has been calculated by IBGE since 1980. It refers to families with monthly income of one to forty minimum wages, whatever the source. It encompasses ten metropolitan areas in the country, besides the municipalities of Goiânia, Campo Grande and Brasília.

NATIONAL CONSUMER PRICE INDEX – INPC

The National Consumer Price Index – INPC changed 0.98% in May and stood 0.34 p.p. above the result of 0.64% in April. The cumulative index in the year stayed at 4.60%, below the rate of 5.99% reported in the same period in 2015.  In the last 12 months, the rate stayed at 9.82%, very close to the rate of 9.83% relative to the 12 immediately previous months.  In May 2015, the INPC stayed at 0.99%.

Food products posted 0.83% in May, whereas they rose 1.11% in April. The group of non-food products changed 1.05% in May, well above the rate of 0.43% in April.

Among the regional indexes, the highest one was registered in the metropolitan area of São Paulo (1.47%), pressed by water and sewage fees (47.83%). It reflected the end of the Program for Reduction of Water Consumption, discontinued by Resolution no. 641 of the Regulatory Agency of Sanitation and Energy of the State of São Paulo  – ARSESP on March 30, 2016. Besides the end of the bonus for reducing and the onus for those increasing the consumption of water practiced by this Program, an adjustment of 8.40% over the fees came into effect on May 12. Goiânia (0.35%) recorded the lowest index (table below).

In order to estimate the index of the month, the prices collected from April 29 to May 30, 2016 (reference) were compared with the prices in force from March 31 to April 28, 2016 (base).

The INPC has been calculated by IBGE since 1979. It refers to families with monthly income of one to five minimum wages, provided that the head of the household is salaried. It encompasses ten metropolitan areas in Brazil, besides the municipalities of Goiânia, Campo Grande and Brasília.