With this result, the Extended Consumer Price National Index (IPCA) accumulated in the year was 1.73%, lower than the index accumulated in the same period of 2005 (3.42%). Considering the last 12 months, the IPCA was 3.97%, also lower than the result of 4.03% relative to the immediately twelve previous months. In July 2005, the index was 0.25%.
 
This is the first release of the price indexes with the new structure of weights, which incorporated the consumer expenses of the Consumer Expenditure  Survey (POF) 2002-2003.  The methodology and the criteria used to  obtain the new weights has also been available (1)  on the IBGE website (www.ibge.gov.br) since December 2005.  With the new structures, items such as gas for vehicles and access to internet, for example, are now surveyed. Some items have gained more importance in the calculation of the indexes, as  microcomputers and telephone services, which includes the acquisition of the telephone equipment.  Regarding the ones which are less important in the calculations, stand out fuel alcohol, residential renting and electricity.

The increase in the IPCA from June (-0.21%) to July (0.19%) can be attributed to increases in transportation (from -0.93% to 0.37%) and food products (from -0.61% to 0.09%), besides the hike in the payment of salaries of household employees (from 0.40% to 1.18%), which incorporated part of the readjustment of the minimum salary in effect since April.

In transportation, gasoline, with an average increase of 0.81% stood out.  This occurred mainly due to the hike in Brasília (5.75%), Goiânia (4.51%) and in the metropolitan areas of Curitiba (3.33%) and Fortaleza (2.47%).  In fuel alcohol, the hike was of 1.04%, due to the influence of São Paulo (3.21%), Goiânia (1.76%) and Brasília (1.43%).  Although it is now the period of the harvest of sugar cane, the prices of alcohol are high, influencing gasoline.

Still regarding transportation, the fares of interstate buses (6.64%) and metropolitan buses (3.14%) increased.  In the interstate buses (6.64%), although the average readjustment was 9.27%, since July 09, some bus lines have eliminated the deductions they were promoting and, in Brasília, for example, the hike reached 17.27%.  In the case of metropolitan buses, the result was defined basically by the metropolitan area of Rio de Janeiro, where fares have increased by 11.81%, as a consequence of the average readjustment of 13.47%, since July 08.

In the case of the group food products and beverages, relative stability of prices was observed in July (0.09%), while in the previous month there had been a decrease (-0.61%).  Although the prices of a great part of food products continue on a downward trend, fruits (8.14%) and rice (4.33%) stood out due to the hike and influenced the result.
Among the non-food products (from -0.10% in June to 0.22% in July), despite the increase in transportation, several important items had deceleration in the growing rate of prices, such as cooking gas (from 1.54% in June to 0.44% in July).  Apparel, with the end of season promotions had fall of 0.24% compared to a hike of 0.59% observed in June.

Electricity (-0.73%) stood out due to the decrease, showing reduction in the bills of several metropolitan areas, mainly São Paulo (-1.02%) and Curitiba (-5.65%).  Only Belém (1.35%) and Recife (0.60%) had a significant hike in the month.  Another bill which turned cheaper was line telephone (-0.27%), which fell in all the surveyed areas because the tariffs had been reduced since July 14.

Regarding the indexes by areas, the highest result was recorded in Brasília (0.82%), where food products had increase of 0.87%, significantly above the average. Besides this, cooking gas increased by 1.30%, and the fares of interstate buses were 17.27% more expensive. Salvador (-0.21%) was the only area with deflation.

IPCA is calculated by IBGE since 1980, and it refers to families with monetary income from any source ranging from 1 to 40 minimum wages.   It includes nine metropolitan areas of the country, besides the municipality of Goiânia and Brasília.  For the calculation of the index of the month, prices collected from June 28 to July 28 (reference period) were compared to prices charged from May 30 to June 27 (base period).

INPC changed by 0.11% compared to –0.07% in June

With the rate of July, the National Consumer Price Index (INPC) accumulated in the year was 1.18%, lower than in the same period of 2005 (3.31%).  In the last 12 months, nevertheless, the rate was 2.87%, above the 2.79% relative to the 12 immediately previous months. In July 2005, INPC was 0.03%.

In July, food products changed negatively by -0.20%, while non-food products increased by 0.23%.
The major indexes by areas were registered in Brasília (0.58%) and Rio de Janeiro (0.56%), while the lowest result, with deflation, was registered in Salvador (-0.25%).

INPC is calculated since 1979, it refers to families with monetary income ranging from 1 to 6 minimum salaries, being the head of family a salaried worker.  It includes nine metropolitan areas of the country, besides the municipality of Goiânia and of Brasília.  For the calculation of the index of the month, prices collected from June 28 to July 28 (reference period) were compared to prices charged from May 30 to June 27 (base period).

(1) The information is available in the publication “Structure of Weights base on the POF - Consumer Expenditure Survey - 2002-2003, Methodology Report Series number 34”.