Brazil records highest inflation in 28 years in March -IBGE

RIO DE JANEIRO, BRAZIL – Brazil recorded its highest inflation this month since the introduction of the Real Plan in March. Prices rose 1.62%, following a 1.01% increase in February. The rate is only lower than in March 1994, before the introduction of the new currency, which was just created to curb hyperinflation.

As a result, cumulative inflation in the last 12 months has reached 11.30%, the highest since October 2003, according to data from the Nationwide Consumer Price Index released this Friday by IBGE.

According to the head of the survey, Pedro Kislanov, the big villains were transport, which rose 3.02%, and food and beverages, up 2.42%. But the diffusion index, which shows the number of items that have increased, reached 76.13%, a record since October 2016, showing that inflation is quite widespread.

In the transport sector, the increase was mainly due to the correction of fuel prices by 6.70% after a new adjustment by Petrobras. Gasoline had the largest impact on the IPCA in March, peaking at 6.95%, but vehicle gasoline, ethanol, and diesel oil prices also increased significantly.

Diesel is the non-food item that has increased the most over the past 12 months at 46.47%.

In the food and beverage group, the price increase of 2.42% resulted mainly from food for household use, which increased by 3.09% last month.

But all food items increased, and common products on the Brazilian table became more expensive. Tomatoes became more expensive by 27.22%, and the already high price of carrots increased by 31.47%. And according to Kislanov, food and beverage inflation has already increased to 11.62% in 12 months.

In addition, this month the housing group also increased by 1.15% due to the increase in gas cylinder prices by 6.57% and electricity prices by 1.08%. Both of these goods are part of the monitored group, as prices are regulated in some way by the government. In March, this group had inflation even higher than the general index, peaking at 2.65%, reaching 14.84 in 12 months.

On Friday, the IBGE also released inflation measured by the National Consumer Price Index, which measures fluctuations in products and services consumed by low-income families. The INPC for March was also the highest for the month since the adoption of the Real Plan: 1.71%.