The Extended National Conumer Price Index (IPCA) of June fell 0.36%, 0.10 percentage points (pp) above the change seen in June (0.26%). This is the highest result for a month in July since 2016, when the IPCA was 0.52%. In the year, the indicator accumulated an increase of 0.46% and, in 12 months, of 2.31%, above the 2.13% of the previous 12 months. In July 2019, the rate had been 0.19%.

Of the nine groups of products and services surveyed, six increased in July. The greatest impact (0.15 percentage points) came from Transportation (0.78%), followed by Housing (0.80%), which accelerated in relation to June (0.04%) and contributed with 0.13 pp. The greatest positive change came from Household articles (0.90% ), with an impact of 0.03 pp. The Food and Beverage group, in turn, was close to stability, with an increase of 0.01%

Among the falls, the highlight was Wearing apparel (-0.52%), whose prices fell for the third consecutive month. The other groups ranged from a 0.12% drop in Education to a 0.51% rise in Communication.

Transportation (0.78%) rose for the second consecutive month, influenced by the increase in gasoline prices (3.42%), which contributed with the greatest individual impact (0.16 p.p.) in July. Diesel fuel (4.21%), ethanol (0.72%) and vehicular gas (0.56%) also rose, taking fuels to an aggregate result of 3.12%. Also noteworthy is the increase in the sub-item subway (0.94%), due to the readjustment of 8.70% in tickets in Rio de Janeiro (3.31%), in effect since June 11.

Also in Transportation, it is worth mentioning the falls observed in the sub-items transportation apps (-8.17%) and airfares (-4.21%), both with an impact of -0.01 p.p.

In the Housing group (0.80%), the largest contribution (0.11 p.p.) came from the item electricity (2.59%). Of the 16 regions surveyed, 13 showed a positive change in the item. There were tariff adjustments in several areas covered by the index:

  • São Paulo (4.49%): 3.60% increase in one of the concessionaires surveyed, in effect since July 4;

  • Fortaleza (5.29%): 3.20% increase as of July 1st;

  • Salvador (3.32%): 4.41% increase in effect since July 1st;

  • Recife (3.47%): 4.55% increase in effect since July 1st;

  • Belo Horizonte (2.65%): 2.59% increase in effect since July 1st;

  • Porto Alegre (2.37%): 5.23% increase in one of the concessionaires surveyed, in effect since July 1st;

  • Curitiba (-2.92%): 0.94% reduction in effect since July 1st.

In Fortaleza and São Paulo, in addition to the increments, there was an increase in the PIS/COFINS rate. In Curitiba, there was a reduction in the rate, in addition to the tariff reduction mentioned above. It is worth remembering that, on May 26, the regulatory agency, ANEEL,  announced that the green flag, in which there is no additional charge on the electricity bill, will be maintained until December.

Also in Housing, it is worth noting that the variations in the sub-items water and sewage rate (0.02%) and piped gas (-0.01%) are due, respectively, to the change in the tariff structure implemented in Brasília (0.46%) , as of June 1, and the 0.27% reduction in tariffs in São Paulo (-0.02%), in force since May 31.

Household articles (0.90%) presented the greatest positive change among the nine groups surveyed, although they have decelerated in relation to the previous month (1.30%). The highlights, once again, are TV, sound and computer articles (2.87%), which contributed with 0.02 pp to the IPCA of July. The prices of household appliances and equipment (1.01%) also increased; whereas the items of furniture (-0.22%) keep falling, although the retreat was lighter than that of June (-1.33%).

In the group  Food and beverage (0.01%) food at home recorded high of 0.14%. The greatest positive impact (0.09 pp) came from meat, whose prices increases 3.68%. Other important food items in the family basket, as long life milk (3.79%), rice (2.20%) and fruit (1.09%) also recorded high. Among the drops, the highlights are potatoes (-24.79%), greatest negative individual contribution to the IPCA of July,  with -0.06 pp, as well as carrots (-20.67%) and tomatoes (-16.78%).

Conversely food away from home recorded decrease of 0.29%, influenced by the result in the subitem snacks (-0.86%). The behavior of meals (-0.06%) was similar to that of the previous month (-0.07%).

The greatest negative change (-0.52%) in the IPCA of July came from the group Wearing apparel, which was already down in May (-0.58%) and June (-0.46%). Men apparel (-1.40%), women apparel (-0.61%) and footwear ans accessories (-0.31%) recorded retreat in prices, whereas kidswear were up 0.18%. Jewels and bijou went up 1.04% and accumulate a high of 7.61 in the year.

Concerning the regional indexes, all the 16 areas surveyed had positive changes. The lowest index was with the Metropolitan Area of Vitória (0.21%), especially due to the price drops of potatoes (-38.28%) and tomatoes (-21.19%). The biggest result, in turn, was in the municipality of  Rio Branco (0.75%), particularly due t the price rise in gasoline (7.04%).

In order to estimate the index of the month, the prices collected from July 1st to 28, 2020 (reference) were compared with the prices in force from May 29 to June 30, 2020 (base).  The IPCA has been calculated by the IBGE since 1980. It refers to households with monthly 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.

It is worth mentioning that due to the pandemic, the IBGE has suspended the face-to-face data collection at the purchase points. As of March 18, prices have been collected through other means, such as surveys on Internet sites, by phone or email.

INPC up 0.44% in July

The National Consumer Price Index - INPC of July had a high of 0.44%, whereas it had registered 0.30 in June. This was the highest figure for July since 2016, when the index stood at 0.64%. The cumulative change over the year was 0.80% and, in the last 12 months, it had a high of 2.69%, above the rate of 2.35% registered in the 12 previous months. In July 2019, the rate was 0.10%.

Having risen 0.14% in July, Food products recorded 0.37% in the previous month. Non-food products, in turn, had a high of 0.53%, after having recorded 0.28% in June.

Concerning the regional indexes, all the 16 areas surveyed had positive changes. The municipality of Rio Branco (0.83%) presented the highest result, mainly due to the highs in gasoline (7.04%) and in meat (4.64%). Conversely, the lowest index stood with the Metropolitan Area of Rio de Janeiro (0.26%), mostly due to the decreases in the prices of potatoes (-29.37%) and tomatoes (-28.12%).

In order to estimate the index of the month, the prices collected from July 1st to 28, 2020 (reference) were compared with the prices in force from May 29 to June 30, 2020 (base).  The INPC has been calculated by the IBGE since 1979. It refers to households with monthly 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.