The Extended National Consumer Price Index (IPCA) of August was -0.73%, versus 0.13% in July. That was the lowest rate in the time series that started in 1991. The cumulative increase in the year amounted to 5.02% and, in the last 12 months, to 9.60%, below the rate of 11.39% recorded in the 12 immediately previous months. In August 2021, the rate was 0.89%.

Six out of nine groups of products and services surveyed registered positive changes. August’s result was mainly influenced by the drop in Transportation (-5.24%), which accounted for -1.15 percentage points to the monthly index (p.p.). The prices in Housing (-0,37%) and Communication (-0,30%) also fell. Among rising figures, the biggest change and the main impact came from Food and beverages (1.12% and 0.24 p.p.). Other highlights were Health and personal care and Personal expenses. Both rose 0.81% and, altogether, accounted for -0.18 p.p of August’s IPCA. The other groups stood between 0.08% of Household articles and 0.76% of Wearing apparel.  

The deflation observed in Transportation (-5.24%) was mainly due to the fall of fuel prices (-15.33%). %). Gasoline fell 16,80% e deu a maior contribuição negativa ao índice do mês (-1.07 p.p.). Ethanol (-10.78%), vehicle gas (-5.40%) and diesel (-0.56%) also recorded decreases. The subitem airfares (-12.22%) also dropped, after recording increases for four months in a row. In terms of increases: privately-owned vehicles (0.83%) remained on an upward trend: motorcycles (0.61%), new cars (0.30%) and used cars (0.17%).

In Housing (-0.37%), the decrease was related to the fall of residential electricity fares (-3.29%). After Complementary Law 194/22 was sanctioned, many states reduced the ICMS share charged for electricity services. In addition to that, the Brazilian Electricity Regulatory Agency (ANEEL) approved the Extraordinary Fare Revisions of 10 distributors spread around the country, thus reducing fares from July 13 on. In the areas investigated by the IPCA, the changes ranged from -16.18% in Recife- where the ICMS was reduced from 25% to 18% and there was interruption of tax charge on transmission and distribution services - up to 2.96% in São Paulo, where there was a price adjustment of 10.43% in the rates of one of the concessionaries surveyed, in effect since July 4th.

The table below shows the nine areas with price adjustment:

It is worth of mention that, in São Paulo, Porto Alegre and Rio de Janeiro, price adjustment was observed in only one of the concessionnaries surveyed in each area. In Rio de Janeiro, the Extraordinary Fare Revision was interrupted on August 2nd.

Also in the group Housing, a highlight is the rise of water and sewage fares (0.52%), which results from the price adjustment of 18.16% in one of the concessionnaires in Porto Alegre (4.66%), on July 1st. The rise of 0.07% in piped gas was due to price adjustments of 0.20% in fares in Rio de Janeiro (0.08%), on August 1st, and of 2.26% in Curitiba (0.30%), on August 9th.

In Communication (-0.30%), the highlight was fixed telephone services and mobile telephony, the prices of which fell 2.29% and 1.04% in August, respectively. Telephone appliances recorded an increase of 0.57%, after a decrease of 0.52% in July.

The result of the group of Food and beverages (1.12%) was mainly influenced by the increase in the prices of long-life milk (14.21%), the main individual impact on the month’s index (0.14 p.p.). In th year, the cumulative change of the product reached 79.79%. Other highlights in the group were fruits (2.99%), which had also risen in July (4..03%), cheese (4.18%) and chicken pieces (3.08%). As a result, food at home changed 1.24% in July.

Food away from home (0.80%) also rose in August, with deceleration from the previous month (1.27%). Both snacks (0.97%) and meals (0.72%) reported changes above those registered in July (of 2.18% and 0.92%, respectively).

The positive change of Health and personal care (0.81%), influenced by health insurance (1.22%), corresponds to the monthly share of the readjustment of 15.50% authorized by the National Regulatory Agency for Private Health Insurance and Plans (ANS) on May 26 for new healthcare plans. It is worth pointing out that in Porto Alegre (2.23%), the monthly share of July was incorporrated to the index, differently from the previous month. Besides, personal hygiene items accelerated from 0.67% in July to 1.03% in August.

The result of Personal expenses (0.81% and 0.08 p.p.) recorded changes close to the previous month (0.79%). The two main subitems were domestic workers (0.80%) and cigarettes (3.32%), the latter due to price adjustments in products traded by two companies surveyed (one between 4.44% and 8.70%, from July 3rd on, and another between 4.44% and 5.13%, from August 1st on.

It is also worth mentioning the rise of education (0.61%). Regular courses rose 0.52% mainly due to the subitems daycare center (1.47%), primary education (0.71%) and higher education (0.44%). Miscellaneous courses recorded an increase of 1.18%, being influenced by language courses (2.15%) and preparatory courses (2.04%).

As for regional indexes, all the areas recorded negative changes in July. The smallest change was that of Belo Horizonte (-1.58%), mainly because of gasoline (-20.50%) and electricity (-13.11%). The biggest change, in turn, was that of São Paulo (-0.11%), whose result was influenced by increases of 11.31% in long life milk and of 2.96% of electricity. . 

In order to estimate IPCA-15, the prices collected from July 14 to August 12, 2022 (reference) were compared with the ones in force from June 14 to July 143, 2022 (base). The indicator refers to households with monthly income of 1 to 40 minimum wages and it encompasses the metropolitan areas of Rio de Janeiro, Porto Alegre, Belo Horizonte, Recife, São Paulo, Belém, Fortaleza, Salvador, Curitiba, as well as Brasília and the municipality of Goiânia. The methodology is the same as the one used for the IPCA; the difference lies in the period of price collection and in the geographic coverage.