IPCA increases by 1.35% in December and closes 2020 at 4.52%

January 12, 2021 09h00 AM | Last Updated: January 14, 2021 05h12 PM

The Extended National Consumer Price Index (IPCA) increased 1.35% in December, by 0.46 percentage points (p. p.) above the 0.89% of November. That is the biggest change since February 2003 (1.57%) and the highest index for a month of December since 2002 (2.10%). In December 2019, the index had reached 1.15%. Housing accounted for the biggest impact (0.45 p. p.) and change (2.88%) in the month.

Period Rate
December 2020 1.35%
November 2020 0,89%
December 2019 1.15%
Cumulative in the year / In 12 months 4.52%

IPCA has a cumulative increase of 4.52% in the year, 0.21 p. p. above the 4.31% registered in 2019. That is the highest cumulative change in the year since December 2016 (6.29%).

Among the groups, Food and Beverages recorded the biggest change (14.09%) and the biggest impact (2.73 p. p.) on the cumulative IPCA in the year, with 2020 closing with the biggest cumulative change in the year since December 2002 (19.47%).

Housing records biggest increase and exerts main impact in December

All the groups surveyed recorded increases in December, with a highlight to Housing, which accounted for the main impact (0.45 p. p.) and the biggest change (2.88%) in the monthly index, having accelerated from November (0.44%). The second main contribution (0.36 p. p.) came from Food and beverages, com 1.74% up. Then came Transportation (0.27 p. p.), with a 1.36% change that was close to that in the previous month (1.33%). Together, the three groups accounted for 80% of the overall impact in December. The other groups ranged between 0.39% of Communication and 1.76% of Household articles.

IPCA - Change and Impact by group - monthly
Group Change (%) Impact (p.p.)
November December November December
General Index 0.89 1.35 0.89 1.35
Food and Beverages 2.54 1.74 0.53 0.36
Housing 0.44 2.88 0.07 0.45
Household Appliances 0.86 1.76 0.03 0.07
Wearing apparel 0.07 0.59 0.00 0.03
Transportation 1.33 1.36 0.26 0.27
health and Personal Care -0.13 0.40 -0.02 0.05
Personal expenses 0.01 0.65 0.00 0.07
Education -0.02 0.48 0.00 0.03
Communication 0.29 0.39 0.02 0.02
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

Acceleration of the group Housing (2.88%) was mainly due to the 9.34% increase of electricity. After 10 consecutive months with the green tariff flag (without additional charge in electricity bills), December brought the red tariff flag level 2, with R$ 6,243 charged per every 100 kw hour consumed. In addition to that, there were adjustments in Rio Branco (11.05%) and Porto Alegre (11.55%). In the capital of Acre, the 2.11% adjustment went into effect on December 13. In the metropolitan area of Porto Alegre, the adjustment by 6.58 % in one of the concessionaries went into effect on November 22. Changes in the item ranged between 6.02% in Belém and 11.91% in Curitiba..

Also in Housing, it is worth mentioning that the result of 0.10% in water and sewage rate is a consequence of the 2.95% adjustment in Vitória (2.66%), in effect since December 1st and 3.04% in Belo Horizonte (0.42%), in effect since November 1st. The rise of bottled gas (0.23%), in turn, results from the adjustment of 6.25% in Rio de Janeiro (0.76%), in effect since November 24, but retroactive to November 1st due to a legal decision. Bottled gas (1.99%) also rose, with a cumulative increase of 9.24%.

In the group Food and beverages (1.74%), there was deceleration against the previous month (2.54%). Significant contributions were the fall of tomato prices (-13.46%) and the less significant increases in meats (3.58%), rice (3.84%) soybean oil (4,99%), which changed by 6.54%, 6.28% and 9.24% in November, respectively. On the other hand, fruits changed from 2.20% to 6.73%. As a result, food at home, a subgroup for all these products, got 2.12% more expensive in December.

Food away from home (0.77%) changed above the figure in the previous month (0.57%), with a highlight to meals (0.74%) and snacks (0.89%).

In Transportation (1.36%), the biggest impact (0.12 p. p.) came from airfares (28.05%). There was rise of prices in all the areas surveyed, ranging between 1.65% in Rio Branco to 44.19% in Recife. It is also worth mentioning the hike of app transportation (13.20%), second main change in the group. The second biggest contribution (0.08 p. p.) came from gasoline (1.54%), the prices of which rose for the second month in a row – ethanol (1.32%), diesel (2.08%) and vehicle gas (4.27%) – also recorded a positive change.

Also in Transportation, the 0.10% decrease in urban buses is a consequence of the decrease of 3.19% in fares in Porto Alegre (-1.30%), in effect since November 9th.

Household articles (1.76%) recorded the second biggest increase among the nine groups surveyed, having accelerated against November (0.86%). Whereas, in November, TV, sound and computer equipment recorded decrease (-1.02%), in December the prices of these products rose 2.52%. Also, there were bigger increases in furniture (2.92%) and household appliances and equipment (1.00%), against changes of 1.48% and 0.72%, respectively, in November.

In the group Education (0.48%), regular courses (0.55%) accounted for the biggest impact, due to the exceptional price collection conducted in December (see technical note 04/2020).

Youth and adult education recorded the biggest change (3.83%), followed by (daycare centers, 54%) and high school (1.19%). However, decreases were also recorded, mainly in technical courses (-0.79%) and graduate education (-0.77%).

IPCA - Chnage by areas - monthly and cumulative in 12 months
Area Regional Weight (%) Change (%) Cumulative change (%)
November December Year
São Luís 1.62 1.01 2.18 5.71
Porto Alegre 8.61 0.80 1.85 4.22
Rio de Janeiro 9.43 0.69 1.62 4.09
Recife 3.92 0.36 1.60 5.66
Belo Horizonte 9.69 0.95 1.53 4.99
Campo Grande 1.57 0.87 1.51 6.85
Belém 3.94 0.48 1.51 4.63
Fortaleza 3.23 0,80 146 5.74
Vitória 1.86 0,97 1.41 5.15
Curitiba 8.09 0.87 1.38 3.95
Rio Branco 0.51 1.10 1.37 6.12
Goiânia 4.17 1.41 1.22 4.33
Brasília 4.06 0.35 1.12 3.40
São Paulo 32.28 1.04 1.09 4.40
Salvador 5.99 1.17 0.92 4,31
Aracaju 1.03 0.42 0.91 4.14
Brazil 100.00 0.89 1.35 4.52
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

All the areas survey recorded increases in December. The lowest index was that of Aracaju (0.91%), mainly due to fall of regular courses tuition (-0.78%) and of some food products such as cheese (-6.33%) and tomato (-6.04%). The highest result was that of São Luís (2.18%), mainly due to the rise of meats (11.30%). 

The IPCA has been calculated by the IBGE since 1980. It refers to households with monetary income of 1 to 40 minimum wages, whatever the source. It encompasses ten metropolitan areas in Brazil, besides the municipalities of Goiânia, Campo Grande, Rio Branco, São Luís, Aracaju and Brasília. In order to estimate the index of the month, prices collected from November 28 to December 29, 2020 (reference) were compared with prices in force from October 28 to November 27, 2020 (base). 

It should be highlighted that, due to the COVID-19 pandemic, the IBGE suspended face-to-face price collection at points of sales on March 18. As of this date, prices began to be collected by other means, such as surveys on the Internet, by phone or email.

INPC rises 1.46% in December and has a cumulative increase of 5.45% in 2020

The National Consumer Price Index – INPC of December was 1.46%, higher than the 0.95% registered in November. That is the biggest change observed since January 2016 (1.51%) and also biggest for a month of December 2002, (2.70%). In December 2019, the rate was 1.22%.

Food products rose 1.86% in December whereas, in the previous month, it had reached 2,65%. Non-food products increased by 1.33%, after a decrease of 0.42% in November.

All the areas surveyed recorded an increase month. The lowest result was that of Aracaju (0.89%), influenced by the fall of prices of telephone appliances (-2.22%) and bread roll (-2.92%). The highest index was that of São Luís (2.09%), mainly due to the rise of 10.82% meats.

INPC - Change by area - monthly and cumulative in 12 months
Area  Regional Weight (%) Change (%) Cumulative Change (%)
November December Year
São Luís 3,47 1,02 2,09 5,58
Porto Alegre 7,15 0,81 1,93 5,22
Rio de Janeiro 9,38 0,79 1,87 5,08
Belo Horizonte 10,35 0,99 1,67 5,85
Recife 5,60 0,41 1,65 6,56
Campo Grande 1,73 0,95 1,62 7,96
Curitiba 7,37 0,97 1,52 4,75
Fortaleza 5,16 0,92 1,46 6,32
Vitória 1,91 1,18 1,43 6,55
Goiânia 4,43 1,40 1,39 5,05
Rio Branco 0,72 1,10 1,38 6,92
Belém 6,95 0,36 1,22 4,32
Brasília 1,97 0,51 1,21 4,22
São Paulo 24,60 1,21 1,20 5,55
Salvador 7,92 1,16 0,96 4,99
Aracaju 1,29 0,44 0,89 4,37
Brasil 100,00 0,95 1,46 5,45
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

The INPC has been calculated by the IBGE since 1979. It refers to households with monetary income of 1 to 5 minimum wages, with a salaried head of the household. It encompasses ten metropolitan areas in Brazil, besides the municipalities of Goiânia, Campo Grande, Rio Branco, São Luís, Aracaju and Brasília. In order to estimate the index of the month, prices collected from November 28 to December 29, 2020 (reference) were compared with prices in force from October 28 to November 27, 2020 (base). 

IPCA has cumulative increase of 4.52% in 2020, highest rate since 2016

O IPCA closed 2020 at 4.52%, 0.21 p. p. above the 4.31% of 2019.

IPCA - Change - month, quarter and year
Month Change (%)
Month Quarter Year
January 0,21   0,21
February 0,25   0,46
March 0,07 0,53 0,53
April -0,31   0,22
May -0,38   -0,16
June 0,26 -0,43 0,10
July 0,36   0,46
August 0,24   0,70
September 0,64 1,24 1,34
October 0,86   2,22
November 0,89   3,13
December 1,35 3,13 4,52
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

The result was mainly influenced by the group Food and beverages, which recorded the biggest change  (14.09%) and the highest cumulative impact (2.73 p. p.) in the year. That is the highest cumulative change in the year since December 2002 (19.47%). Then came Housing, with a hike of 5.25% and a contribution of 0.82 p. p., and Household articles, with 6.00% of increase and 0.23 p. p. of impact. The three groups accounted, together, for almost 84% of the IPCA in 2020. Transportation, the second biggest contribution to IPCA, closed the year at 1.03%. The only group to record a negative change was Wearing apparel (-1.13%), whose impact was -0.05 p. p. The table below shows the results by groups of products and services.

IPCA - Variação e Impacto por grupos - no ano
Group Change (%) Impact (p.p.)
2019 2020 2019 2020
General Index 4,31 4,52 4,31 4,52
Food and Beverages  6,37 14,09 1,57 2,73
Housing 3,90 5,25 0,62 0,82
Household articles -0,36 6,00 -0,01 0,23
Wearing apparel 0,74 -1,13 0,04 -0,05
Transportation 3,57 1,03 0,66 0,21
Health and personal care 5,41 1,50 0,65 0,20
Personal expenses  4,67 1,03 0,51 0,11
Education 4,75 1,13 0,23 0,07
Communication 1,07 3,42 0,04 0,20
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

In the group Food and beverages (14.09%), the biggest monthly changes were recorded in two different periods: in March (1.13%) and April (1.79%), right after the implementation of social distancing measures adopted due to the COVID-19 pandemic; and from September to December, with changes above 1.70% in the last four months of the year. 

Main hikes in Food and Beverages - in the year
Item 2019 2020
Change (%) Change (%) Impact (p.p.)
Meats 32,40 17,97 0,48
Rice 1,17 76,01 0,36
Fruits 7,25 25,40 0,22
Soybean oil 8,81 103,79 0,18
Long life milk  6,05 26,93 0,17
Snacks 6,04 10,08 0,16
Processed meat and fish  5,24 15,89 0,10
Meals 3,14 2,67 0,10
Potato -2,21 67,27 0,10
Tomato -30,45 52,76 0,09
Chicken - pieces 15,26 14,08 0,08
Chicken - whole 12,21 17,16 0,06
Cheese -1,25 9,79 0,05
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

The main products accouting for rise in the group were soybean oil (103.79%), rice (76.01%), long life milk (26.93%), fruit (25.40%) and meats (17.97%).

Also, prices of other important items in the basket of poducts, such as potato (67.27%) and tomato (52.76%) also recorded significant increases in 2020.

In Housing (5.25%), the biggest contribution (0.40 p. p.) came from electricity (9.14%). That result was influenced by the change in the tariff flag from November (green) to December (red, level 2), since, up to November, the cumulative change in já que até novembro a variação acumulada no ano era de -0the year was -0.18%. It is worth piting out that, whereas the green flag has no extra charge, the red flag level 2 adds R$ 6,243 to the bill per eveyry 100 kw-hour consumed.

Electricity - tariff flag per month
Month Monthly Change Tariff Flag Additional charge per 100 kwh consumed
January 0,16% Yellow 1,343
February -1,71% Green -
March 0,12% Green -
April -0,76% Green -
May -0,58% Green -
June -0,34% Green -
July 2,59% Green -
August 0,27% Green -
September 0,07% Green -
October 0,03% Green -
November 0,01% Green -
December 9,34% Red 2 R$ 6,243
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

In the group Household articles (6.00%), the highlight was tv, sound and computer equipment, whose prices rose 18.75% in the year. Except for furniture (-3,20%), all the items in the group recorded decrease.

In Transportation (1.03%), the biggest positive contributions came from new cars (4.03%) and used cars (2.80%), besides licensing and license plate acquisition (3.70%). Gasoline, the main individual element within the IPCA, closed the year at 0.19%. Despite the seven consecutive increases from June to December, prices fell in the months of April (-9.31%) and May (-4.35%). Airfares (-17.15%) also closed 2020 on a downward trend, accounting for the biggest negative impact in the group (-0.12 p. p.).

In Wearing apparel (-1.13%), the most significant negative impact (-0.06 p. p.) came from female apparel, which had a cumulative decrease of 4.09% in the year. Prices of footwear and accessories (-2.14%) and male apparel (-0.25%) and children apparel (-0.13%) also fell. Jewelry and costume jewelry rose15. 48%, with positive rates in all the months of 2020. 

In the other groups, the highlights were health insurance (2.44%) in Health and personal care (1.50%) and telephone appliance (6.87%) in Communication (3.42%). In the case of health insurance, in the end of August, the National Regulatory Agency for Private Health Insurance and Plans (ANS) decided to postpone price adjustments of health insurance contracts until the end of 2020.

IPCA - Change by area - in the year - 2020 and 2019
Area Regional Weight
(%)
Annual change (%)
2019 2020
Campo Grande 1,57 4,65 6,85
Rio Branco 0,51 3,82 6,12
Fortaleza 3,23 5,01 5,74
São Luís 1,62 4,28 5,71
Recife 3,92 3,71 5,66
Vitória 1,86 3,29 5,15
Belo Horizonte 9,69 4,20 4,99
Belém 3,94 5,51 4,63
São Paulo 32,28 4,60 4,40
Goiânia 4,17 4,37 4,33
Salvador 5,99 3,93 4,31
Porto Alegre 8,61 4,08 4,22
Aracaju 1,03 4,11 4,14
Rio de Janeiro 9,43 4,05 4,09
Curitiba 8,09 3,99 3,95
Brasília 4,06 3,76 3,40
Brasil 100,00 4,31 4,52
Fonte: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

Among the regional indexes, the municipality of Campo Grande (6.85%) had the biggest change in 2020, mainly due to the rise of meats (25.38%) and gasoline (8.65%). The lowest index, in turn, was registered in Brasília (3.40%), with contributions from the fall of airfares (-20.01%), of app transportation (-18.71%), of furniture items (-7.82%) and  lodging (-6.26%).

INPC closes 2020 with a 5.45% increase

INPC closed 2020 with a hike of 5.45%, above the 4.48% registered in 2019. Food products rose by 15.53%, whereas non-food products changed by 2.60%. In 2019, the group Food and beverages had changed by 6.84% and non-food products, by 3.48%. The table below presents results by groups of products and services.

INPC - Change and Impact by groups - in the year 
Group Change (%) Impact (p.p.)
2019 2020 2019 2020
General Index 4,48 5,45 4,48 5,45
Food and beverages 6,84 15,53 2,07 3,42
Housing 3,86 5,69 0,71 1,00
Household articles -0,60 5,30 -0,03 0,24
Wearing apparel  0,51 -1,37 0,04 -0,07
Transportation 4,38 1,52 0,70 0,31
Health and Personal Care 4,90 1,66 0,49 0,20
Personal expenses 4,56 1,26 0,34 0,10
Education 4,63 0,66 0,14 0,03
Communication 0,69 3,58 0,02 0,22
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços

Among the regional index, the highest rate was that of Campo Grande (7.96%), especially due to the rise of food products, such as meats (29.01%) and rice (75.31%). The smallest change was observed in Brasília (4.22%), influenced by the fall of prices of air fares (-20,01%) and some wearing apparel items, such as female apparel (-4.96%) and footwear and accessories (-4.87%).

INPC - Change by area - in the year - 2020 and 2019
Area Regional Weight
(%)
Annual change (%)
2019 2020
Campo Grande 1.73 4.76 7.96
Rio Branco 0.72 3.74 6.92
Recife 5.60 3.59 6.56
Vitória 1.91 3.63 6.55
Fortaleza 5.16 4.96 6.32
Belo Horizonte 10.35 4.45 5.85
São Luís 3.47 4.45 5.58
São Paulo 24.60 4.89 5.55
Porto Alegre 7.15 4.11 5.22
Rio de Janeiro 9.38 4.07 5.08
Goiânia 4.43 4.90 5.05
Salvador 7.92 3.85 4.99
Curitiba 7.37 4.31 4.75
Aracaju 1.29 4.13 4.37
Belém 6.95 5.76 4.32
Brasília 1.97 3.52 4.22
Brazil 100.00 4.48 5.45
Source: IBGE, Diretoria de Pesquisas, Coordenação de Índices de Preços