The Extended Consumer Price Index (IPCA) of December changed by 0.48%, accumulating 3.14% in 2006, 2.55 percentage points below 2005 (5.69%).  It was the lowest result since 1998 (1.65%).  The reduction in the rate was determined by the good supply of agricultural products, the influence of currency and the lowest increases in electricity, telephony and fuels.  The items which brought the major influence in the result of the year were health plans (12.30%), schools (6.79%), urban bus tariffs (8.11%) and salaries of household employees (10.73%).  The metropolitan area of Belo Horizonte (4.96%) presented the major index of 2006, nevertheless all the surveyed areas had results below the ones of 2005.  With some hikes, 2006 showed an historical of convergence for price stability.

Since the significant hike of 12.53% of 2002, the IPCA of 2006 (3.14%) was the lowest one.  The reduction on the rate was determined basically by four factors. The first one was the good supply of agricultural products, which brought stability in the price of food products or even deflation, such as black beans (-34.11%) and powdered milk (-9.3%); the second factor was the influence of currency, which contributed to the stability of prices of personal care (0.65%) and reduction in TV, audio and computer equipment (-12.07%) and cleaning products (-2.29%); the third was the contribution of managed prices, such as electricity changing only 0.28%, and fixed telephony, -0.83% in the year; the fourth factor was the contribution of fuels, which increased by 2.30%, since there was not increase in the price of gasoline in the refineries.

The items which brought the major influences on the IPCA were health plans (12.3); schools (6.79%); urban buses tariffs (8.11%); and salaries of household employees (10.73%).  In relation to urban tariffs, even without adjustment in 4 (Fortaleza, Salvador, Curitiba and Goiânia) among 11 surveyed areas and with Recife presenting decrease (-3.04%), the increases in the other areas resulted in the rate of 8.11% in the year. The salaries of household employees increased by 10.73%, following the readjustment of the minimum salary, which changed from R$ 300.00 to R$ 350.00 (16.67%).

Among the monthly rates of 2006, the major inflation was registered in January (0.59%), due to hikes of fuel alcohol and in the tariffs of urban buses.  Among the groups, personal expenses was the one that most increased (7.23%).  Household items brought the lowest result: -2.72%.  Food products recorded a change of 1.22%.  Some products stood out with higher prices, such as rice (13.60%), cassava flour (11.98%) and refined sugar (15.73%) and crystallized sugar (16.49%). 

Nevertheless the majority had moderate increases, such as pullets (0.82%) and meats (0.70%), or even decrease, such as tomatoes (-24.17%) and black beans (-34.12%).  Non-food products increased by 4.23%, 2.87% in the first and 1.32% in the second semester.

The metropolitan area of Belo Horizonte (4.96%) continued with the highest IPCA of 2006, mainly due to increases which occurred in food products (4.31%),  water and sewerage account (10.24%), bottled gas (11.03%), electricity (6,33%), condominium fees (11.42%), urban buses (12.12%), gasoline (3.80%) and alcohol (2.17%).  The lowest index was observed in Curitiba (2.50%), very close to the one of Goiânia (2.58%), Fortaleza (2.61%) and São Paulo (2.63%).

National Consumer Price Index (INPC) closed the year of 2006 with 2.81%

The INPC closed the year of 2006 with a rate of 2.81%.  Food products changed by 0.94%, while non-food products increased by 3.59%.  In 2005, the result of the year was 5.05%, with hike of 1.43% in the items food products and 6.59% in non-food products.  Among the indexes by areas, in 2006, the highest was observed in Brasília (4.75%).  The lowest was the one of Curitiba (1.74%).

In December, IPCA was 0.48%

The IPCA of December (0.48%) changed above the one registered in November (0.31%), as well as the one of December 2005 (0.36%).  The main causes of the hike originated in the metropolitan area of São Paulo, whose index changed from 0.26% to 0.92% from November to December, with the group transportation bringing the major influence.

The group transportation reached 2.91% in São Paulo and had contribution of 0.63 percentage points.  While changing from R$ 2.00 to R$ 2.30 since November 30, urban buses tariffs had readjustment of 15.00%.  In this state, occurred increase also in the tariffs of inter municipal buses, whose reflection of the average readjustment of 12.00%, since November 30, influenced in 11.85% the index of the month.  There was still increase in the tariffs of cabs, whose change of 10.23% was a result of the readjustment occurred in December 9th.  The tariffs of train and subway were more expensive, both with change of 9.05%, due to the readjustment of 9.52%, in November 30th.

Besides São Paulo (from 0.26% to 0.92%), only the metropolitan areas of Rio de Janeiro (from  0.20% to 0.31%) and Porto Alegre (from 0.13% to 0.23%) had hike in November to December. The areas that had the lowest hikes were Salvador (0.15%) and Curitiba (0.15%).

In the IPCA, the group transportation changed by 1.14%, which led to a contribution of 0.24  percentage points and made it responsible for half of rate of December.  The urban buses had tariffs  4.61% more expensive caused not only by São Paulo but also by Rio de Janeiro, area where it was observed change  of 4.21%, due to the readjustment of 5.26% since December 4, when the modal tariff changed from R$ 1.90 to R$ 2.00.  Urban buses were responsible for the major individual contribution in the month: 0.17 percentage points.

Following, with 0.04 percentage points, were the tariffs of inter municipal  buses, 3.52% more expensive, due mainly to São Paulo (11.85%), with increases also in Fortaleza (2.92%) and Belo Horizonte (2.40%).  The tariffs of cabs, with changes in prices in São Paulo (10.23%) and Goiânia (5.49%), were, on the average, 2.55% more expensive, while the ones of subway (9.05%), and train (9.05%), readjusted only in São Paulo, had average changes of 6.47% and 6.07%, respectively.

Apparel (from 0.65% to 1.00%) and condominium fees (from 0.08% to 0.81%) also had increase from November to December.  Cigarettes (from 4.63% to 1.88%), although in a less intense way, also brought influence to IPCA.  Food products (from 1.05% to 0.39%) had a result considerably lower than the one of November.

To calculate IPCA, prices collected from November 29 to December 28 (reference period) were compared to prices charged from October 28 to November 28 (base period).  IPCA refers to families whose income from any source ranges from 01 to 40 minimum salaries. It encompasses nine metropolitan areas besides the municipality of Goiânia and Brasília.

INPC was 0.62% in December

The INPC changed by 0.62% in December, above the rate of 0.42% of November. The hike was caused by São Paulo (from 0.42% to 1.48%) and Rio de Janeiro (from 0.14% to 0.51%), only areas with hike.  In December 2005, the index was 0.40%.  In the INPC of the month, food products changed by 0.37%, while non-food products increased by 0.71%.  The major index by areas was observed in São Paulo (1.48%).  The lowest one was observed in Salvador (0.10%).

The INPC refers to families with income ranging from 01 to 06 minimum salaries, headed by a salaried worker, and encompasses 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 November 29 to December 28 (reference period) were compared to prices charged from October 28 to November 28 (base period).