The Extended National Consumer Price Index (IPCA) of July was -0.68%, versus 0.67% in June. That is the lowest rate registered since the beginning of the time series, in January 1980. IPCA has had a cumulative increase of 4.77% in the year and of 10.07% in the last 12 months, below the 11.89% of the immediately previous 12 months. In July 2021, the index changed by 0.96%.

Two of the nine groups of products and services surveyed recorded deflation in July, whereas the other seven recorded rise of prices. The month’s result was mainly affected by Transportation, which recorded the most significant decrease (-4.51%), and accounted for the biggest negative impact (-1.00 percentage point) on the July index.

There was also fall of prices in Housing (-1.05%), with an impact of -0.16 p.p. The biggest positive change was that of Food and beverages (1.30%), which accelerated from June (0.80%), and accounted for 0.28 p.p. Wearing apparel (0.58%) and Health and personal care (0.49%) made the opposite movement and decelerated from the previous month (with 1.67% and 1.24%, respectively).

The other groups ranged between 0.06% in Education and 1.13% in Personal expenses, second biggest positive change in July.

The decrease of 4.51% in the group Transportation was mainly due to the fall of rfuel prices (-14.15%). The price of gasoline fell 15.48% and that ofethanol did by 11.38%. Gasoline, alone, accounted for the main positive impact among the 377 subitems that form the IPCA, with -1.04 p.p. Also, there was fall of the price of vehicle gas , with -5.67%. The only fuel recording an increase in July was diesel (4.59%), the result of which was above that in the previous month (3.82%).

Also regarding Transportation, a highlight is the rise of prices of air fares (8.02%), although at a lower rate in comparison with June (11.32%). Urban buses (0.18%) also recorded a positive change, as a result of the price adjustment of 11.36% in Salvador (2.30%), effectively applied from June 4 on. With reference to privately-owned vehicles (0.65%), there was deceleration of price rises of new cars (0.11%) and motorcycles (0.65%), and used cars recorded a decrease of 0.21%.

The fall of Housing (-1.05%) is mainly related to the decrease in residential electricity (-5.78%). 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 -17.00% in Vitória - where the ICMS was reduced from 25% to 17% and there was interruption of tax charge on transmission and distribution services - up to 0.37% 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 10 areas with price adjustment:

It is worthy 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.

Also in terms of Housing, the highlight is the rise of water and sewage (0.96%), which results from price adjustments in two areas of coverage: in Porto Alegre (8.42%), there was price adjustment of 18.16% in one of the concessionnaires starting on July 1st; in Campo Grande (2.09%), adjustment of 1.70% in July, as a complement to the price adjustment of 5.00% implemented in January.

In the group Food and beverages (1.30%),the highlight was food at home, which accelerated from 0.63% in June to 1.47% in July. The main positive impact on the monthly index (0.22 p.p.) was that of long life milk (25.46%), whose prices had risen 10.72% in the previous month. Besides, the prices of some dairy products, such as cheese (5.28%), a butter (5.75%) and condensed milk (6.66%) also rose, as a contribution to the month’s result. Another highlight was fruits, which rose 4.40% and an impact of 0.04 p.p. on the IPCA of July. The main decreases were recorded by tomato (-23.68%), potato (-16.62%) and carrots (-15.34%), which, together, accounted for -0.12 p.p.

Food away from home (0.82%) decelerated in relation to June (1.26%), as a result of the less significant changes of snacks (1.32%) and meals (0.53%). In the previous month, the changes of both subitems were 2.21% and 0.95%, respectively.

The group Wearing apparel decelerated from 1.67% to 0.58%, after recording the biggest positive change among the groups surveyd in the months of May and June. Men's apparel went from 2.19% in June to 0.65% in July, whereas women's apparel changed from 2.00% to 0.41%. Footwear and accessories (1.05%) recorded a change slightly below that in the previous month, when they recorded 1.21%.

Deceleration of the group Health and personal care (0.49%) is related to the item health insurance (1.13%). In June, monthly shares relative to May and June were incorporated to the adjustment of 15.50%, authorized by the National Regulatory Agency for Private Health Insurance and Plans (ANS) on May 26. In July, only the monthly share corresponding to was incorporated to the monthly index. It is worth remembering that new insurance plans represent 89% in the calculation of the subitem, whereas old insurance plans, prior to law 9,656/98, account for 11%. Another highlight is the decrease of 0.23% in personal hygiene items, against the rise of 0.55% in June.

Finally, it is worth mentioning the result of the group Personal expenses (1.13%), which accelerated against the previous month (0.49%) and accounted for the second main positive impact (0.11 p.p.) on July’s month. The two main subitems were domestic workers (1.25%) and cigarettes (4.37%), the latter due to price adjustments between 4.44% and 8.70% in products traded one of the companies surveyed, from July 3rd on.

As for regional indexes, all the areas recorded negative changes in July. The smallest change was registered in Goiânia (-2.12%), affected by the decreases of 21.57% in the prices of gasoline and of 14.90% in electricity. The biggest change was that of São Paulo (-0.07%), the only region to record increase in electricity (0.37%) in the month. Other contributions to the result of the area came from long life milk (21.95%) and residential rent (1.85%).

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. In order to estimate the index of the month, the prices collected from June 30 to July 28, 2022 (reference) were compared with the prices in force from May 28 to June 29, 2022 (base).

INPC was -0.60% in July

The National Consumer Price Index - INPCrecorded a decrease of 0.60% in July, lowest change recorded since the beginning of the time series, in April 1979. In the year, the INPC has a cumulative increase of 4.98% and, in the last 12 months, of 10.12%, below the 11.92% observed in the 12 previous months. In July 2021, the rate was 1.02%.

Food products went from 0.78% in June to 1.31% in July, whereas non-food products went from 0.57% to -1.21%.

As for regional indexes, except for São Paulo (0.38%), all the areas recorded decreases in July. Goiânia (-1.81%)recorded the lowest result, due fall of prices of gasoline (-21.57%) and electricity (-14.92%). The increase in São Paulo was mainly due to electricity (7.52%) and long life milk (21.95%).

In order to estimate the index of the month, the prices collected from June 30 to July 28, 2022 (reference) were compared with the prices in force from May 28 to June 29, 2022 (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.