Brazilian Inflation Decelerates in March


Brazil’s National Wide Consumer Price Index (IPCA), which measures the country’s official inflation, reached 0.71% in March, decelerating in relation to February, when it was 0.84%, and reaching the lowest level since January 2021, it was announced Tuesday.

In March 2022, the IPCA reached 1.62%. This year, the index has accumulated a 2.09% rise, and in the last 12 months, 4.65%, lower than the 5.60% registered in the immediately previous period, it was also reported.

The greatest impact (0.43 percentage points – pp) and the greatest variation (2.11%) in the index last month came from the Transportation group. With an 8.33% hike in prices, gasoline represented the greatest individual impact on the March index (0.39 pp) and weighed heavily in the group’s behavior. Ethanol advanced by 3.2%. The data were released Tuesday by the Brazilian Institute of Geography and Statistics (IBGE).

Analyst André Almeida explained that the return of the federal tax collection at the beginning of the month was the reason for the increase in gasoline and ethanol. “The results for gasoline and ethanol were influenced mainly by the return of the collection of federal taxes at the beginning of the month, established by Provisional Measure 1157/2023. There was, therefore, the forecast of the return of PIS/Cofins collection on these fuels as of March 1st,” he said.

Also in the transportation group, vehicular gas registered a drop of 2.61% and diesel oil, of 3.71%. Airline tickets, which had dropped 9.38% in February, fell 5.32% this time around. Readjustments in cab fares in Belo Horizonte, intercity bus fares in the Rio de Janeiro metropolitan region, and urban bus fares in four areas covered by the index also influenced the Transport performance.

In the sequence of highs were health and personal care (0.82%) and housing (0.57%). In both cases there was a slowdown in relation to February, contributing 0.11 pp and 0.09 pp, respectively. The health and personal care group was pressured, especially, by the 1.20% advance in health insurance, which continues to incorporate the monthly installments of new and old plans referring to the 2022-2023 cycle. In the housing group, the greatest impact (0.09 pp) came from residential electricity, which rose 2.23%.

The drop in foodstuffs at home, which went from a high of 0.04% in February to a retreat of 0.14% in March, was the cause of the 0.05% increase in food and beverages. Another group that rose (0.50%) was communication. In contrast, the household goods group, which dropped 0.27% after climbing 0.11% in February, was the only one to register a decline this month.

Negative variations in March in the items television, stereos, and computers (-1.77%) were the main factors responsible for the group’s behavior. “The promotions carried out during consumer week, which took place in March, may have influenced it,” reported the analyst.

In regional measurements, all areas advanced in March, with the largest variation registered in Porto Alegre (1.25%). The causes were high gasoline prices (10.63%) and residential electricity (9.79%). Fortaleza, with a 0.35% hike, showed the smallest variation in the month, with 17.94% drops in tomato prices and 2.91% for chickens.

According to the IBGE, the IPCA is calculated based on families with incomes of 1 to 40 minimum wages living in the metropolitan regions of Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Vitória, Rio de Janeiro, São Paulo, Curitiba, Porto Alegre, in addition to the Federal District and the cities of Goiânia, Campo Grande, Rio Branco, São Luís, and Aracaju.

Source: mercopress