Lower increase in food prices and in controlled prices, together with declining fuel cost, leads to reduction in relation to April.

The Extended Consumer Price Index (IPCA) has changed by 0.49% in May, and is 0.38 percentage point below the 0.87% released in April. This result leads to an accumulated IPCA of 3.18% this year, a figure superior to the 2.75% registered in the same period last year. For the last twelve months, the index was 8.05%, nearing that of the immediately previous twelve months, 8.07%. In May 2004, the monthly index was also similar to the current one: 0.51%.

The slight increase in regulated (or controlled) prices of some items, in the price of food products and the decrease in fuel prices, were the determining factors in the reduction of the index.

Even with a smaller growth in relation to the previous month (1.81% in May versus 1.81% in April), medicines represented the biggest individual contribution to May’s IPCA: 0.07 percentage point. In the last two months medicines became, on average, 5.13% more expensive due to readjustments in prices of controlled medicines authorized by CMED (Medicine Regulation Chamber)

Urban bus fares,

which caused the greatest impact on April’s index, together with medicines, had their prices increased by 0.82% in May, differently from what was observed in the previous month, 2.57%. Only in Rio de Janeiro (4.05%) have fares become more expensive, as a consequence of a readjustment (12.50%) in effect since April 09.

The price of electrical energy services, which had been 2.22% more expensive in April, rose 1.78% in May, although the value for the tax related to sudden interruption of energy services ("blackout insurance") fell from R$0.0067 to R$0.0060 (10.45%), on April 20.

Bills are more expensive in four areas: Porto Alegre (2.64%), reflecting the readjustment in tasks and in the ICMS (Tax on Services and Product Circulation); Belo Horizonte (4.63%), because of readjustment of 18% since April 20; Salvador (14.59%), due to the increase of 20% on April 22; and Recife (15.98%), where taxes had been readjusted 20% on April 29, but have returned to the previous price level since May 27.

In May were also registered rises in the sectors of apparel (1.45%) and important items such as vehicle insurance (2.36%), household appliances (1.67%), health insurance (0.92%) and intercity bus fares. (0.85%).

Food products

rose by 0.65%, whereas in April the figure had been 0.81%. Some products are cheaper, for instance, fruits (-4.09%), fish (-3.30%), rice (-2.35%), crystallized sugar (-1,90%) and meat (-1.08%).

The cost of fuels is lower as well. The price of fuel alcohol fell 5.42% - the exceptions are due to price changes in Brasília (2.00%) and Belém (1.01%). The price of gasoline fell about 0.64%, having risen only in Brasilia (4,06%) and Salvador (2.76%). Cooking gas on the other hand, had a price reduction of 0.46%, despite the rise in Goiânia (1.49%).

Results by Area 

Recife (1.16%) and Salvador (1.11%) were the metropolitan areas which presented the highest prices in May. Similarly to Brasília and to the Belém area, they were the only ones with an increase in IPCA in comparison with April. Goiânia had the lowest index: (-0.52%).

IPCA is related to families whose monthly income ranges from 1 to 40 minimum wages (from whatever source), and encompasses nine metropolitan regions in Brazil, besides the municipalities of Goiânia and Brasília. May’s index was measured through the comparison of prices collected between April 29 and May 30 (reference) with prices in effect between March 30 and April 28 (base).

INPC also falls in May

The National Consumer Price Index (INPC) has changed by 0.70% in May and was 0.21 percentage point below April’s index (0.91% ). With the result of May, the index accumulates 3.39% em 2005, above the 2.63% registered in the same period last year. The INPC for the last twelve months is 6.93%, a figure higher than that obtained for the preceding twelve months, 6.61%. In May 2004, INPC had a monthly change of 0.40%.

By area, the highest index result by area was obtained in Recife (1.61%) and the lowest one in Goiânia (-0.11%).

IPCA refers to families whose monthly income ranges from 1 to 8 minimum wages (from whatever source), with a wage-earner as head of the household. The index encompasses nine metropolitan regions in Brazil, besides the municipalities of Goiânia and Brasília.