Transportation becomes the main IPCA component as of 2020

October 11, 2019 10h00 AM | Last Updated: October 14, 2019 11h06 AM

In January 2020, the transportation group will become the major component of the Extended National Consumer Prices (IPCA), accounting for 20.8% of the indicator. It is the first time this group surpasses Food and beverages, which now contributes with nearly 19% of the rate.

With 377 products and services, the IPCA's new weighting structure, based on the results of the 2017-2018 Consumer Expenditure Survey (POF), will be in effect from January 2020's results on, which should be published in the beginning of February by the IBGE. The new structure counts on six less subitems than the current one, which is based on the 2008-2009 POF, in effect since January 2012.

Transportation apps, Public transportation integration, Streaming services and cell phones, pay TV and Internet bundles are some of the 56 new subitems in the basket. DVD players, newspaper subscription and cameras, among others, will no be longer surveyed.

Among the 16 areas which compose the index, the Metropolitan Area of Rio de Janeiro was the one with more contribution losses considering the new structure, decreasing from 12.06% to 9.41%. São Paulo (from 30.67% to 32.32%) and Brasília (from 2.80% to 4.09%) were the ones with greater participation gains.

Transportation becomes the major IPCA component, but participation decreases

Even becoming the main component of the IPCA, the Transportation group lost its share in relation to the current index weighting structure, from approximately 22.0% to 20.8%. There was a reduction in the weight of the item Public Transportation, from 4.50% to 3.16%. Additionally, the subitems Public Transportation Integration (0.07%) and Transportation  Apps (0.21%) were incorporated.

IPCA POF 08/09 POF 17/18
Food and beverages 22.0828 18.9880
Housing 14.2752 15.1593
Household articles 5.4323 4.0215
Wearing apparel 6.2289 4.8010
Transportation 21.9527 20.8377
Health and personal care 11.0797 13.4575
Personal expenses 9.1933 10.5972
Education 4.1811 5.9519
Communication 5.5740 6.1859

On the other hand, the weight of vehicle ownership (11.66%) shows how household expenditures are used with the acquisition and/or maintenance of vehicles, such as license plate, driver's license, insurance, fine, parking, maintenance and repair, parts and accessories etc.

São Paulo increases its participation in the IPCA

In addition to remaining the area with the highest weight among the 16 that make up the index, São Paulo gained participation in the new IPCA structure, going from 30.67% to 32.32%. Rio de Janeiro (from 12.06% to 9.41%) and Belo Horizonte (from 10.86% to 9.84%) lost weight. Rio Branco, even with a share gain of 0.09 percentage points, remains with the lowest weight.

  IPCA POF 08/09 POF 17/18
AC Rio Branco 0.42 0.51
BA Salvador 6.12 5.99
CE Fortaleza 2.91 3.22
DF Brasília 2.80 4.09
ES Vitória 1.78 1.86
GO Goiânia 3.59 4.16
MA São Luís 1.87 1.62
MG Belo Horizonte 10.86 9.74
MS Campo Grande 1.51 1.58
PA Belém 4.23 3.91
PE Recife 4.20 3.93
PR Curitiba 7.79 8.05
RJ Rio de Janeiro 12.06 9.41
RS Porto Alegre 8.40 8.59
SE Aracaju 0.79 1.02
SP São Paulo 30.67 32.32

New consumer trends change the IPCA basket

High-tech products and services, practical consumption, healthy living and beauty, as well as pet spending are some of the consumer trends that have contributed to changing the household product basket. In IPCA, 56 new products and services are included in the index. Others, such as DVD Players, Newspaper Subscription, Photocopies, Camera, Film Developing and Copying, are either no longer surveyed or have been added to other subitems.

Streaming services (0.08%), transportation apps (0.21%), Telephony, Internet and pay-TV (1.81%) and Mobile device repair (0.07%) are some of the products and technological services that are going to be researched.

In the case of practical consumption, foods such as instant noodles (0.03%) and frozen fruit pulp (0.01%) stand out.

Bicycle repair (0.18%), Eyebrow design (0.11%), Physical activity (0.40%), Hairdressing and Barber services (1.09%) and Waxing services (0.06%) are examples of items related to Healthy life and beauty.

Other highlights are the new subitems that have been added as their importance increased, such as Animal Care (vet clinic services) (0.30%) and Animal Groomers (0.13%).

The IPCA is the official inflation index of Brazil. It covers 16 areas and reflects the consumer basket of households with monthly incomes ranging from 1 to 40 minimum wages, whatever the source.

INPC has 61 new products or services

The National Consumer Price Index (INPC) now has 61 new subitems, such as air conditioning and wine consumed at home. As a whole, there are 368 products and/or services surveyed, four less than in the current basket.

Although there were changes in group weights, Food and beverages remained the main group in the composition of the index, decreasing from approximately 27.3% to 21.5%. As in the IPCA, the Transportation group had a participation gain of about 1.8 percentage points.

INPC POF 08/09 POF 17/18
Food and beverages 27.2552 21.5054
Housing 16.4278 17.0485
Household articles 6.5578 4.9023
Wearing apparel 7.5839 5.6997
Transportation 18.2122 20.0252
Health and personal aare 9.7919 11.8534
Personal expenses 6.4706 7.9741
Education 2.6884 4.3735
Communication 5.0122 6.6179

The composition of regional weights, in turn, defined by the criterion of urban resident population, remained similar to the current one. São Paulo remained as the area with the highest weight (24.60%) and Rio Branco, although it increased its share, was still the area with the lowest weight in the index (0.72%).

  INPC POF 08/09 POF 17/18
AC Rio Branco 0.59 0.72
BA Salvador 8.75 7.92
CE Fortaleza 5.42 5.16
DF Brasília 1.88 1.97
ES Vitória 1.83 1.91
GO Goiânia 4.15 4.43
MA São Luís 3.11 3.47
MG Belo Horizonte 10.60 10.35
MS Campo Grande 1.64 1.73
PA Belém 6.44 6.95
PE Recife 5.88 5.60
PR Curitiba 7.29 7.37
RJ Rio de Janeiro 9.51 9.38
RS Porto Alegre 7.38 7.15
SE Aracaju 1.29 1.29
SP São Paulo 24.24 24.60

The INPC covers 16 areas and includes families whose income ranges from 1 to 5 minimum wages, with salaried household head.