By Lisa Flueckiger, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – The forecast for the inflation in Brazil for 2015 has been increased again after data for June and July were registered by the IBGE (Brazilian Statistics Bureau). While the Central Bank’s forecast had reached 9.15 percent for the year on Monday, July 20th, the IBGE’s IPCA-15 Consumer Price Index could reach 9.25 percent.
In July, inflation over the month fell to 0.59 percent according to the Statistics Bureau. This result was significantly lower than the data for June, where 0.99 percent were registered, but still constitutes the highest result for the month of July since 2008.
From June to July, food prices had less of an impact on consumer’s pockets, while the housing segment of the price index weighted more mainly due to higher electricity prices.
Accumulated over the year, the IPCA-15 has already reached 6.9 percent in 2015 and is set to reach 9.25 percent over the entire twelve months. This would be the highest result since 2003, where the index had recorded 9.86 percent.
The IPCA-15 is a consumer price index produced by the IBGE collected from the 15th of a month to the 15th of the next month. The index reflects consumption by families whose incomes range from one to forty national minimum wages.
The official inflation forecast published by Brazil’s Central Bank this week had estimated inflation to reach 9.15 percent in 2015. A rise in the estimate for the fourteenth consecutive time. If confirmed, this would also be the highest result since 2003, where inflation had been at 9.3 percent.
On the other hand, the forecast for the country’s GDP is sinking again after having stalled last week. Forecasts are now estimating a contraction of 1.7 percent. This would be the worst result for Brazil since 1990. In 2016, the GDP is set to grow by only 0.33 percent.
In the first trimester of 2015, the Brazilian economy has already contracted by 0.2 percent according to IBGE. This result was influenced by the bad result of the service sector and industry, as well as lower consumption by families.