The Extended National Consumer Price Index - IPCA stayed at 0.44% in December, standing 0.16 percentage points (p.p.) above the November´s figure (0.28%). This was the highest monthly change in 2017. In December 2016, the IPCA hit 0.30%. As a result, the cumulative IPCA in 2017 stayed at 2.95%, standing 3.34 p.p. below the rate of 6.29% registered in 2016. This was the lowest cumulative index since 1998 (1.65%). The INPC stayed at 0.26% in December and closed the year at 2.07%, the lowest cumulative rate since the implementation of the Real Plan. The complete data of the IPCA and INPC can be accessed here.

After declining from 0.42% in October to 0.28% in November, the IPCA rose once again in December to 0.44%, mainly influenced by the acceleration in the rate of the groups of Food and Beverages (from -0.38% in November to 0.54% in December) and Transportation (from 0.52% to 1.23%).

After seven consecutive months of negative changes, the group ofFood products changed from -0.38% in November to 0.54% in December due to food consumed at home, which changed from -0.72% to 0.42%. Although the prices of some products fell, like carioca beans (-6.73%) and long-life milk (-1.43%), other important products in the meals of Brazilians exerted a reverse pressure, like meat (1.67%), fruits (1.33%), whole chicken (2.04%) and French bread (0.67%).

Food consumed away from home also accelerated between November and December, whose prices increased, on average, 0.74%. See below the major rises and drops in the group of food products.

The major individual impacts on the month´s index, both of 0.09 p.p., were exerted by airfare, which rose 22.28% and gasoline, whose price of the liter became, on average, 2.26% more expensive. Impacting 0.18 p.p., these two products together accounted for 41% of the December´s IPCA.

They were the main products that caused the group of Transportation (1.23%) to register the highest rise this month, also considering the increase of 4.37% in ethanol, which impacted 0.04 p.p. As to gasoline, the increase reflected the adjustments granted during the data collection period, which added up to 2.05%.

In the group of Wearing apparel (0.84%), the highlights were men’s wearing apparel (1.27%), children´s wearing apparel (1.05%), women’s wearing apparel (0.71%) and footwear (0.69%).

Considering the other groups, the highlights on the rise side were: health plan (1.06%), domestic workers (0.52%) and household appliances (0.36%).

On the other hand, the major downward impact was exerted by electricity (-0.12 p.p.), of the group of Housing (-0.40%), since the bills became 3.09% cheaper. This was due to the return of the red tariff flag level 1 on December 1st, which cost an additional R$0.03 per kWh consumed, in place of the red tariff flag level 2, which implied an additional cost of R$0.05 per kWh. The adjustment of 29.60% in one of the energy concessionaires in Porto Alegre, in force since December 21, should be highlighted as well.

On the rise side of the group of Housing, water and sewage fees (1.19%) and bottled gas (1.09%) stood out. The first was due to the adjustments of 7.89%, 5.25% and 8.43%, respectively, in the fares of São Paulo, in force since November 10; Rio de Janeiro, as of November 27; and Belém, since December 12. The change in bottled gas reflected the average adjustment of 8.90% in the price of gas sold in 13-kg cylinders, authorized by Petrobras in the refineries as of December 5.

Regarding the regional indexes, the highest one was recorded in the metropolitan area of São Paulo (0.62%), where the prices of meals away from home rose 1.75%, with an impact of 0.10 p.p. The rises of 23.23% in airfare, 5.26% in ethanol and 2.39% in gasoline also pressed this month´s figures in that area. Belém (-0.18%) posted the lowest index, as a result of the drop of 6.05% in electricity. 

IPCA accrues change of 2.95% in 2017

The IPCA ended 2017 with a change of 2.95%, 3.34 p.p. below the rate of 6.29% registered in 2016. As a result, this was the lowest cumulative index since 1998 (1.65%). Along 2017, the rates were distributed as follows:

The index in 2017 was particularly influenced by the expenditures with products and services of the groups of Housing (with a rise of 6.26% and an impact of 0.95 p.p), Health and Personal Care (with a rise of 6.52% and an impact of 0.76 p.p.) and Transportation (with a rise of 4.10% and an impact of 0.74 p.p.). Together, these three groups represented 2.45 p.p. and accounted for 83% of the rate. Having dropped 1.87% and impacted -0.48 p.p., the group of Food and Beverages held down the index. The results of the groups of products and services surveyed are shown in the following table:

In 2017, the agricultural output stood about 30% above the harvest in the previous year. As a result, the prices of the group of Food and Beverages, which represents nearly 1/4 of the expenses of the households, dropped 1.87% and exerted the major negative impact on the index. This was the lowest figure (-1.87%) and the only time that this group recorded a deflation in the year since the implementation of the Real Plan.

The drop in the food prices was particularly due to food for consumption at home. Weighting 15.67%, these food products fell 4.85%, whereas food consumed away from home, which weights 8.88%, increased 3.83%.

In regional terms, all the areas surveyed reported a deflation in food products, with the rates varying from -4.28% in Belém to -0.21% in Brasília.

Considering food purchased to consume at home, a number of them posted a significant drop in the prices, highlighted by fruits (-16.52%), the biggest negative impact on the overall index (-0.19 p.p.). The major drops in food products were as follows.

Standing just behind the group of Education (7.11%), in which regular courses (8.37%) stood out, the group of Housing (6.26%) registered the second highest change, though it recorded the biggest group impact (0.95 p.p.). The major influences came from important items in the expenditures of households, like bottled gas (16.00% and 0.19 p.p.), water and sewage fees (10.52% and 0.17 p.p.) and electricity (10.35% and 0.35 p.p.).

Along 2017, Petrobras authorized an adjustment in the refineries of 84.31% in the price of gas sold in 13-kg cylinders. The surveyed areas varied from 5.28% in Curitiba to 33.52% in Recife. The water and sewage fees (10.52%) stayed between 3.09% in Brasília and 22.96% in Belém. In Belém, a complementary adjustment of about 8.43% came into force on December 12, in addition to the average adjustment of 17.50% that took place in June.

Electricity (10.35%) varied between -0.33% in Campo Grande and 30.54% in Goiânia. The former recorded a reduction of -1.92% in the fare. Goiânia, on its turn, posted an increase of 15.70%. It should be highlighted that the discount of up to 19.50% applied to the electricity bills in April decided by the Brazilian Electricity Regulatory Agency - Aneel, in order to compensate consumers by an improper charge in 2016, the so-called Charge of Reserve Power - EER, destined to fund the power plant of Angra III. In addition, tariff flags came into force along the year, implying an additional charge, according to the table below.

Health and Personal Care closed the year with a change of 6.52%. In this group, the pressure came from health plans (13.53%) and medicines (4.44%). These items are important expenses in the consumer budget, weighting 3.88% and 3.47%, respectively. The National Regulatory Agency for Private Health Insurance and Plans - ANS granted an adjustment of 13.55% for health plans in 2017. As to medicines, the maximum adjustment authorized by the Drug Market Regulation Chamber - Cmed was of 4.76%.

In Transportation (4.10%), which represents 18% of the IPCA, only surpassed by food products, the highlights were: gasoline (10.32%), intercity bus (6.84%), vehicle licensing (4.29%), urban bus (4.04%) and car repair (2.66%).

Concerning gasoline, the price policy of Petrobras that allows the technical areas of marketing and sales to adjust the prices of fuels in the refineries, aiming at following the exchange rate and the foreign prices of oil and derivatives, was in force since July 3, 2017. Taking into account the period between July 3 and December 28 – final data collection day of the IPCA in December –, 115 adjustments in the gasoline price were granted, accruing a total increase of 25.49%. The PIS/COFINS tax rate for fuels was also adjusted in July. In gasoline, the rate changed from R$0.3816 to R$0.7925 per liter.

In addition to the previous groups, Personal expenses (4.39%), in which the domestic workers  (6.47%) item stood out; Wearing apparel (2.88%), highlighting footwear (4.01%), and Communication (1.76%), with a change of 6.04% in mobile telephone, ended the year with positive rates. On the other hand, Household articles (-1.48%) contributed to hold down the yearly rate, highlighting TV, sound and computers  (-6.50%) and household appliances (-2.65%).

Among the regional indexes, Goiânia and Brasília recorded the highest change (3.76% both). In Goiânia, the highlight was electricity, which rose 30.54%, and gasoline, which increased 15.28%. In Brasília, the highlights were gasoline and urban bus, whose rises were 17.86% and 25.00%, respectively. The lowest index was registered in Belém (1.14%), where the drops in carioca beans (-46.21%) and crystallized sugar (-35.62%) helped to hold down the rate. The indexes, by area surveyed, are shown in the following table:

IPCA has been calculated by IBGE since 1980. It refers to families with monthly income of one to 40 minimum wages, whatever the source, and it encompasses ten metropolitan areas in Brazil, besides the municipalities of Goiânia, Campo Grande and Brasília. In order to estimate the index of the month, the prices collected from November 30 to December 28,  2017 (reference) were compared with the prices in force from October 31 to November 29, 2017 (base).

INPC rises 0.26% in December and closes 2017 at 2.07%

The National Consumer Price Index - INPC changed 0.26% in December and stood 0.08 p.p. above the November´s rate (0.18%). As a result, the cumulative index in 2017 stayed at 2.07%, quite lower than the 6.58% rate registered in 2016 and the lowest cumulative rate in the year since the implementation of the Real Plan. In December 2016, the INPC recorded 0.14%.

Food products rose 0.43% in December, whereas it dropped in the previous month (-0.54%). The group of non-food products changed 0.19%, below the rate of 0.49% of November.

Concerning the regional indexes, the highest one was reported in Fortaleza (0.48%), where food products increased 0.58%, above the national index (0.43%), highlighted by whole chicken (4.49%) andfruits (4.38%). Belém (-0.29%) recorded the lowest index, influenced by the drop of 6.43% in electricity. See below the table of monthly results by area surveyed.

In the end of 2017, the INPC accrued 2.07%, below the 6.58% rate of 2016 by 4.51 p.p. This was the lowest cumulative rate in the year since the implementation of the Real Plan. Food products changed -2.70%, whereas non-food products increased 4.25%. In 2016, food products had risen 9.15% and non-food products, 5.44%. The table below shows the results by group of products and services.

Concerning the regional indexes, the highest one was recorded in Curitiba (3.24%), as a result of the rise of 20.93% in electricity and of 20.40% in urban bus. The lowest index was registered in Belém (0.74%), where the drops in carioca beans (-46.21%) and crystallized sugar (-35.62%) helped to hold down the rate. The indexes, by area surveyed, are shown in the following table:

INPC has been calculated by IBGE since 1979. It refers to families with monthly income of one to five minimum wages, with a salaried head of the family, and it encompasses ten metropolitan areas in Brazil, besides the municipalities of Goiânia, Campo Grande and Brasília. In order to estimate the index of the month, the prices collected from November 30 to December 28,  2017 (reference) were compared with the prices in force from October 31 to November 29, 2017 (base).