The IPCA index was the lowest for December since 2008 (0.28%). In 2016, the index registered a cumulative rise of 6.29%, standing below the cumulative rates in 2015 (10.67%) and 2014 (6.41%). The group of Food and Beverages exerted the biggest influence on the indexes of the month and year. The INPC changed 0.14% in December and recorded a cumulative rise of 6.58% in 2016.

The Extended National Consumer Price Index - IPCA rose 0,30% in December, surpassing the November rate of 0.18% by 0.12 percentage points (p.p.). Even so, this was the lowest rate for December since 2008 (0.28%). In December 2015, the IPCA hit 0.96%, the highest rate for December since 2002 (2.10%).

After declining from 0.26% to 0.18% between October and November, the IPCA rose again (0.30%) under the influence of the groups of Food and Beverages (from -0.20% in November to 0.08% in December), Personal expenses (from 0.47% to 1.01%) and Transportation (from 0.28% to 1.11%), as shown in the table below.

Food products increased from -0.20% to 0.08% due to food consumed at home (from -0.47% in November to -0.05% in December). Regardless of the drop in some food products, like carioca beans (-13.77%) and long-life milk (-3.97%), other important products in the diet of the Brazilians exerted a reverse pressure, like rice (0.21%), meat (0.77%) and fruits (3.39%). In December, food away from home maintained the same rate as in November (0.33%).

Major dropping food items

Major rising food items

The major individual impacts this month came from airfare, which rose 26.29% and 0.10 p.p., gasoline (1.75% and 0.07 p.p.) and cigarettes (4.80% and 0.05 p.p.). These three items together impacted 0.22 p.p., the equivalent of 73% of the IPCA. Airfare and gasoline were the main responsible for the rate of Transportation (1.11%), the highest rise of a group this month. Other items in this group also reported price increases, like voluntary insurance (2.92%), diesel oil (1.47%), ethanol (0.75%) and car repair (0.57%). In the case of gasoline, the increase reflected the adjustment of 8.10% in force since December 6. Diesel oil was also adjusted in the same date (9.50%).

In Personal expenses (1.01%), the biggest pressure came from cigarettes (4.80%), as a result of price adjustments from December 1st onwards. Excursion (0.91%), domestic workers (0.87%) and hairdresser (0.53%) also influenced. In the other groups, the rise of cleaning products (1.18%), health insurance (1.07%), manpower for small repairs (0.87%), men’s wearing apparel (0.72%) and women’s wearing apparel (0.66%) stood out.

The major downward impact (-0.13 p.p.) came from electricity (-3.70%). This drop in the prices was due to the return of the green tariff flag on December 1st, replacing the yellow one, which caused an additional cost of R$1.50 per each 100 kilowatt-hour consumed. Electricity fare also decreased by 11.49% in Porto Alegre, reflecting the reduction of 16.28% in the fare of one of the concessionaires since November 22. In Rio de Janeiro, the retreat in electricity (-4.98%) reflected the reduction of 11.73% in one of the local concessionaires since November 7.

Other highlights in terms of dropping prices were: TV, sound and computers (-2.15%), used cars (-1.65%) and household appliances (-0.62%).

The highest regional index was registered in Brasília (1.12%), where the prices of airfare rose 21.30%, impacting 0.40 p.p. The rise of 1.06% in the prices of food consumed at home also pressed the results this month. The metropolitan area of Porto Alegre (-0.04%) recorded the lowest index, considering the drop of 11.49% in electricity previously mentioned. The regional indexes follow below:

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. In order to estimate the index of the month, the prices collected from December 1st to December 29, 2016 (reference) were compared with the prices in force from October 28 to November 30, 2016 (base).

INPC changes 0.14% in December

The National Consumer Price Index - INPC changed 0.14% in December and stood 0.07 p.p. above the rate of 0.07% in November. As a result, the cumulative index in the year stayed at 6.58%, quite below the rate of 11.28% posted in 2015. The INPC changed 0.90% in December 2015.

Food products changed 0.05% in December, after declining (-0.31%) in November. Non-food products (0.18%) rose less than in November (0.25%).

The highest regional INPC was registered in Brasília (0.87%), where food products rose 0.70%, quite above the national index (0.05%). The items residential rent (1.90%) and airfare (21.30%) also contributed to the result this month. The lowest index was recorded in the metropolitan area of Curitiba (-0.15%), as shown in the table below:

In order to estimate the index of the month, the prices collected from December 1st to December 29, 2016 (reference) were compared with the prices in force from October 28 to November 30, 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.

Cumulative IPCA in 2016 (6.29%) lower than in 2015 (10.67%)

The cumulative IPCA in 2016 (6.29%) stood well below (4.38 p.p.) the IPCA in 2015 (10.67%). Throughout the year, the rates were distributed like this:

The main influences were the groups of food and beverages (rise of 8.62% and impact of 2.17 p.p.) and health and personal care (11.04% and impact of 1.23 p.p.). Altogether, these two groups added up to 3.40 p.p. and were responsible for 54% of the IPCA (table below):

In a year when the agricultural production stayed 12% below that harvested in 2015, consumers started to pay, on average, 8.62% more than in 2015 to purchase food. This positioned Food and Beverages – which weights 25% in the household expenditures – as a leader in the impacts of groups. Food consumed at home – which weights 17.00% in the IPCA – rose 9.36%, whereas food consumed away from home – which weights 8.83% – increased 7.22%. However, food away from home led the ranking of individual impacts (0.63 p.p.). The metropolitan area of Fortaleza (12.05%) was the region where the prices increased the most in 2016 (see table below).

Significant rises were registered among food consumed at home, highlighted by beans (56.56%) and rice (16.16%), which comprise the typical diet of Brazilians:

Onions (-36.50%), potatoes (-29.03%), tomatoes (-27.82%) and carrots
(-20.47%) stood out among the products that became cheaper this year.

Health and Personal care was the group that recorded the highest cumulative rise in the year (11.04%) and the only one out of the nine groups whose prices increased more in 2016 than in 2015. The biggest pressure came from health insurance tuition (13.55%), whose cumulative change was the highest since 1997. The cumulative rise of medicines (12.50%) was the highest since 2000. Personal hygiene products also stood out in this group (9.49%).

The groups of Education (8.86%), highlighting regular courses (9.12%) and Personal expenses (8.00%), highlighting the item domestic workers (10.27%) ended the year above the IPCA. The other groups remained below the IPCA, showing figures between 1.27% (Communication) and 4.22% (Transportation), contributing to limit the yearly rate.

In the group of Transportation (4.22%) – which holds 18% of the IPCA, only surpassed by food products –, the rise of public transportation (7.78%) stood out: intercity buses (11.78%), urban buses (9.34%), subway (9.14%), train (8.45%), interstate buses (7.66%) and taxi (7.06%). Airfare was an exception, as it closed the year dropping 4.88%.

In the case of urban buses (9.34%), the adjustments were expressive in some areas, though they did not happen in three of them: Brasília, Belém and Fortaleza. The highest rise was posted in Curitiba (16.12%), followed by Porto Alegre (15.38%) and Recife (14.54%).

The item privately-owned vehicles (2.91%) stood well below public transportation (7.78%), even considering the strong rise of fines, which changed 68.31% in the year. As big contributors to the index, new cars (0.48%) and, particularly, used cars (-4.46%) limited the result of this item.

Also in the group of Transportation, fuel closed the year at 3.25%, being 2.54% due to gasoline and 2.21% to diesel oil. As of October, the price of fuels began to be defined by the Petrobras´ Executive Group of Market and Prices - GEMP, on a monthly basis. On October 15, GEMP reduced the prices of gasoline by 3.20% and of diesel oil by 2.70%. On November 8, gasoline was reduced by 3.10% and diesel oil, by 10.40%. On December 6, GEMP increased the prices of gasoline by 8.10% and of diesel oil by 9.50%. The liter of ethanol rose 6.66% due to problems in the harvest of sugarcane.

The major contribution to limit the cumulative IPCA rate in the year came from electricity (change of -10.66% and impact of -0.43 p.p.), from the group of Housing (2.85%). The metropolitan area of Curitiba stood out, as the electricity bills retreated 21.53% over 2015. Electricity also registered a strong drop in Rio de Janeiro (-14.19%), Goiânia
(-15.65%), São Paulo (-14.11%), Porto Alegre (-12.38%) and Vitória (-9.51%).

The metropolitan area of Fortaleza recorded the highest change (8.34%), due to the rise of 12.05% of the group of Food and Beverages. The highlight was food consumed at home, which increased 13.75%, well above food consumed away from home (7.27%). The lowest index was reported in Curitiba (4.43%), where the electricity bills became 21.53% cheaper, reflecting the reduction of 13.83% in the fares on June 24, as well as the reduction in PIS/COFINS throughout the year and the return of the green tariff flag. Curitiba posted the highest change in 2015 (12.58%), as a result of the adjustment of 50% in the ICMS on a number of items since April 1st, 2015. The regional indexes follow below:

INPC registers a cumulative rise of 6.58% in 2016

The INPC closed 2016 at 6.58%, 4.70 p.p. below the rate of 11.28% in 2015. Food products changed 9.15%, whereas non-food products changed 5.44%. In 2015, food products had risen 12.36% and the non-food products, 10.80% (see table below):

The metropolitan area of Fortaleza (8.61%) posted the highest change, reflecting the rise in the group of Food and Beverages (12.31%), which highlighted food consumed at home (13.74%), which surpassed the rise of food consumed away from home (7.42%). The lowest index was registered in the metropolitan area of Curitiba (4.21%), where electricity bills became 22.35% cheaper. Curitiba had recorded the highest change in 2015 (13.81%), as a result of the impact of the adjustment of 50% in the ICMS on a number of items. The indexes by area surveyed, are shown in the table below: