Brazil’s May Inflation Rises to 0.44%, Below Forecasts

In May, Brazil’s National Consumer Price Index (IPCA-15) increased by 0.44%, up from April’s 0.21%.

Despite the rise, this figure missed market analysts’ prediction of 0.47%.

Interestingly, this is the lowest May inflation rate since 2021, which also saw a 0.44% increase.

In comparison, last year’s May rate was higher at 0.51%. This year, the IPCA-15 has climbed by 2.12%.

Over the past twelve months, it recorded a 3.7% increase, slightly down from 3.77% in April.

The IBGE reported that eight out of nine groups of goods and services saw positive results in May.

Notably, Health and Personal Care rose by 1.07%, contributing 0.14 percentage points, and Transportation grew by 0.77%, adding 0.16 points.

Other variations ranged from a decrease of 0.44% in Household Items to a 0.66% increase in Clothing.

In Health and Personal Care, pharmaceutical products had the biggest impact, rising 2.06%.

This increase followed a price hike of up to 4.5% for medications, effective from March 31.

Additionally, personal hygiene items accelerated from 0.29% in April to 0.87% in May, mainly due to a 1.98% rise in perfume prices.

May Inflation Rises to 0.44%, Below Forecasts

In the Transportation sector, gasoline prices went up by 1.9%, and airline tickets soared by 6.04%.

Ethanol rose by 4.70%, diesel by 0.37%, while vehicular gas prices fell by 0.11%.

In the Food and Beverages group, at-home food costs rose by 0.22% in May.

Contributing to this were price hikes in onions (up 16.05%), ground coffee (up 2.78%), and long-life milk (up 1.94%).

However, carioca beans dropped by 5.36%, fruit prices fell by 1.89%, rice by 1.25%, and meat by 0.72%.

Background

On the other hand, Brazil’s Producer Price Index (IPP) experienced a notable rise of 0.74% in April.

This marked the third consecutive month of gains, signaling subtle yet significant shifts in the country’s industrial landscape.

Despite a previous year’s overall decline of 3.08%, April’s increase of wholesale inflation contributed to a modest annual growth of 0.99%.

Brazil’s Producer Price Index (IPP) tracks price changes received by domestic producers, reflecting wholesale inflation.

Sector performances varied. The paper and cellulose industry led with a surge of 3.99%, while pharmaceuticals also rose by 2.10%.

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