The Broad Consumer Price Index (IPCA), Brazil’s official inflation metric, recorded a rate of 0.12% in July.
This rate surpassed figures from the previous month (-0.08%) and July of the prior year (-0.68%), as revealed by the Brazilian Institute of Geography and Statistics on Friday (11).
With this, the cumulative inflation for the year stands at 2.99%. Over 12 months, there’s a price increase rate of 3.99%, exceeding the 3.16% noted until June.
The transportation sector chiefly drove the surge in inflation, noting a price hike of 1.50% in July.
This was primarily due to a 4.75% rise in gasoline costs.
Other areas experiencing inflation included vehicular gas (3.84%), ethanol (1.57%), airfare (4.97%), and new cars (1.65%).
“The significant role of gasoline in the IPCA basket means its 4% increase had the most significant effect on July’s IPCA.
Without this gasoline spike, the IPCA would have been -0.11%, lower than the previous month’s,” remarked IBGE researcher André Almeida.
Conversely, food products experienced deflation (price decline), which tempered the IPCA’s increase.
The food and beverage category saw a -0.46% change, influenced by items like carioca beans (-9.24%), soybean oil (-4.77%), cut chicken (-2.64%), meats (-2.14%), and UHT milk (-1.86%).
The housing segment also noted significant deflation (-1.01%), mainly attributed to a 3.89% drop in residential electricity costs.
This drop in household electricity tariffs was pivotal in moderating inflation.
“The reduction is tied to the incorporation of the Itaipu bonus, credited in July’s bills,” explained Almeida.
Other expenditure categories observing inflation included household items (0.04%), health and personal care (0.26%), personal expenses (0.38%), and education (0.13%). While communication saw stable prices, clothing underwent deflation (-0.24%).