The Extended National Consumer Price Index (IPCA) of August rose 0.24%, being 0.12 percentage points (p.p.) below the rate of July (0.36%). That is the biggest result for a month of August since 2016, when the IPCA was 0.44%. The indicator has a cumulative increase of 0.70% in the year and of 2,44% in 12 months, being above the 2.31% registered in the previous 12 months. In August 2019, the IPCA changed was of 0.11%.

Period	Rate
August 2020	0.24%
July 2020	0.36%
August 2019	0.11%
Cumulative in the year	0.70%
Cumulative in the last 12 months	2.44%

Among the nine groups of products and services surveyed, six recorded increases in August. The biggest change was that of Transportation (0.82%), which also accounted for the main positive impact on the monthly index (0.16 p.p.). The second main contribution (0.15 p.p.) came from Food and Beverages, which accounted for an increase of 0.78%. The groups Housing (0.36%) and Household articles (0.56%) also recorded increases but decelerated against the previous month (0.80% and 0.90%, respectively). In terms of decreases, a highlight was Education (-3.47%), which accounted for -0.22 p.p. of the IPCA in August. The other groups ranged between a decrease of 0.78% in Wearing apparel and an increase of 0.67% in Communication.

Transportation (0.82%) recorded an increase for the third straight month, once more, due to the hike of gasoline prices, which rose 3.22% in August. Diesel (2.49%) and ethanol (1.29%) also recorded positive changes, whereas vehicle gas fell 0.79%.  

In the same group, prices of  app transportation (0.37%) rose, after a decrease of 8.17% in July. Airfares (-1.97%) remain on a downward trend, although they registered smaller decrease than a month ago (-4.21%).

Food and beverages (0.78%) accelerated against July, when it was close to stability (0.01%). Food at home rose 1.15%, mainly due to the rise in the prices of tomato (12.98%), long-life milk (4.84%), fruit (3.37%) and meat (3.33%). Other highlight are changes in soybean oil (9.48%) and rice (3.08%), with a cumulative increase of 19.25% in the year. On the other hand, there was fall of prices of onions (-17.18%), garlic (-14.16%), potato (-12.40%) and pinto beans (-5.85%).

Food away from home (-0.11%) remains on a downward trend, although at a lower rate than a month ago  (-0.29%). Meals, in turn, went from -0.06% in July to -0.56% in August, snacks went from a decrease by 0.86% para to an increase of by. 078%, accounting for 0.01 p.p. of the monthly index.

In Housing (0.36%), the main impact in August were residential rents (0.32%) and electricity (0.27%), both 0.01 p.p. changes in the item electricity ranged from -2.06% in Fortaleza to 3.17% in São Luís. There was adjustment of fares in two areas, from August  7: in Belém (0.13%), of 2.86% and Vitória (0.09%), of 5.93%. It is worth pointing out that the changes reported consider, besides the charged fares, PIS/COFINS shares, a contribution from public electricity and the tariff flag. On May 26 ANEEL announced the continuation of the green tariff flag, when there is no additional charge on electricity bills, up to December 2020.

In the same group, bottled gas (-1.67%) recorded a negative change due to decreases of  5.16% in Rio de Janeiro (-4.64%), starting on August 1^st, and of 8.88% in Curitiba (-2.68%), since August 19. Water and sewage fares (0.43%) rose due to the 3.40% adjustment in São Paulo (1.47%), in effect since August 15. It is also worth mentioning rise of construction material prices, for example, brick (9.32%) and cement (5.42%), which had risen in July (4.13% and 4.04%, respectively).

Prices of Household appliances (0.56%) rose for the fourth straight month, although they accelerated from June (1.30%) and July (0.90%). The main contributions came from TV, sound and computer equipment (2.06%), with 0.02 p.p., and household appliances (0.93%), with 0.01 p.p. Furniture, in turn, (-0.82%) once more recorded decrease.

The main negative change (-3.47%) and the main negative contribution (-0.22 p.p.) to the IPCA of August came from Education. Due to the suspension of face-to-face classes during the Covid-19 pandemic, many teaching establishments granted discounts in fees, which were properly considered in the August’s  IPCA, according to Technical  Note no. 02/2020. As a result, prices of regular courses fell 4.38%. The biggest decrease was that of pre-school (-7. 71%), followed by graduate courses (-5.84%), youth and adult education (-4.80%) and daycare centers (-4.76%).

Wearing apparel (-0.78%) , also recorded a negative change in August, more significantly than in July (-0.52%). Fall of prices was registered by male’s apparel (-0.74%), female’s apparel (-1.23%), children’s apparel (-1.46%) and footwear and accessories (-0.55%). Jewelry and costume jewelry, on the other hand, rose 2.32%, with a cumulative increase of 10.11% in the year.

In Communication (0.67%), a highlight was the subitem access to the Internet (8.51%), with an impact of 0.05 p.p. on the monthly index. The hike was due to the price adjustment of broadband services in one of the companies surveyed.

Regarding regional indexes, five of the 16 areas surveyed had deflation in August. The lowest index was that of Aracaju (-0.30%), mainly due to the fall of regular courses (-7.27%). The highest result came from the municipality of Campo Grande (1.04%), mainly due to rise of some food product prices, such as meat (6.28%) and fruits (9.54%).

In order to estimate the index of the month, prices collected from July 29^th to August 27^th, 2020 (reference) were compared with prices in force from July 01^st to June 28^th, 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 0.36% in August

The National Consumer Price Index – INPC of August recorded an increase of 0.36% whereas, in July, it had recorded 0.44%. That is the highest result for a month of August since 2012, when the index was 0.45%. In the year, INPC had a cumulative increase of  1.16% and, in the last 12 months, of 2.94%, above the 2.69% registered in the previous 12 months. In August 2019, the rate was 0.12%.

Food products rose 0.80% in August, whereas, in the previous month, the rate was 0.14%. Non-food products rose 0.23%, after a rate of 0.53% in July.

As for regional indexes, two of the 16 areas surveyed had deflation in August, as shown in the table below. The municipality of Aracaju (-0.23%) had the lowest result, mainly due to the fall of regular courses (-9.15%). The highest index was that of Campo Grande (1.33%), mainly due to the rise of meat (6.66%) and fruit (14.64%) prices.

In order to estimate the index of the month, prices collected from July 29^th to August 27^th, 2020 (reference) were compared with prices in force from July 01^st to June 28^th, 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.