General Price Index in Brazil drops 0.14% in December and accumulates a 17.3% hike in 2021 -FGV

RIO DE JANEIRO, BRAZIL – The General Price Index – 10 (IGP-10), calculated by the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV Ibre), fell 0.14% in December. In the previous month, the index had risen 1.19%.

From January to December 2021, the index accumulated a high of 17.30%. In December 2020, the index had risen 1.97% in the month and accumulated a rise of 24.16% in 12 months.

“The IGP-10 is the first version of the general index to close the calendar year, for which it accumulated a high of 17.30%. Among the items that most challenged producer inflation are products whose harvests were affected by drought (sugar cane 57.55%), frosts (coffee bean 148.05%), and oil price advances (Diesel 82.82%).

The high of the IGP and of the producer index was not more intense thanks to the drops registered in the prices of iron ore (-24.27%), soy bran (-15.49%), and paddy rice (-36.85%),” says André Braz, Coordinator of the Price Indices, in a commentary on the report.

With a weight of 60%, the Broad Producer Price Index (IPA) fell 0.51% in December. In the previous month, the index had registered a rate of 1.31%. Analyzed by stage of processing, prices for finished goods varied from 1.29% in November to 0.42% in December.

The main contribution to this result came from the consumer fuels subgroup, which slid from 8.48% to 2.69%. The index for Final Goods (ex), which excludes fresh food and fuel for consumption, varied 0.46% in December. In the previous month, the rate had climbed 0.73%.

The rate for the Intermediate Goods group slid from 3.71% in November to 1.98% in December. The main contribution to this movement came from the materials and components for the manufacturing subgroup, whose rate slid from 2.67% to 1.19%.

The Intermediate Goods index (ex), obtained after excluding the production fuels and lubricants subgroup, rose 1.60% in December, against 2.85% in the previous month.

The index for the Raw Materials group slid from -0.98% in November to -3.78% in December. The main contributions to the retreat in the rate came from the following items: iron ore (1.23% to -19.28%), soybeans (-1.39% to -3.41%), and poultry (-0.03% to -4.95%).

On the upside, the most relevant movements occurred in the cattle (-8.46% to 11.28%), cassava/pipeline (-2.02% to 4.39%), and sugar cane (2.06% to 3.08%) items.

With a weight of 30%, the Consumer Price Index (IPC) rose 1.08% in December. In November, the index had presented a rate of 0.79%. Three of the eight expenditure categories comprising the index witnessed increases: Education, Reading and Recreation (0.05% to 2.61%), Housing (0.36% to 0.77%), and Transportation (2.17% to 2.49%).

The main contributions to this movement came from the following items: airfare (-0.42% to 17.18%), residential electricity rates (0.06% to 1.86%), and gasoline (5.09% to 5.50%).

On the other hand, the Foodstuff (0.81% to 0.59%), Clothing (0.87% to 0.19%), Health and Personal Care (0.29% to 0.12%), Communication (0.33% to 0.08%) and Miscellaneous Expenses (0.27% to 0.16%) groups all showed decreases.

In these categories, the greatest influences came from the following items: vegetables and legumes (11.38% to 1.20%), footwear (1.34% to -0.06%), hygiene and personal care articles (0.76% to -0.06%), residential telephone rates (3.65% to 0.00%) and food for domestic animals (2.10% to 0.78%).

With the remaining 10%, the National Index for Construction Cost (INCC) varied 0.54% in December. The previous month the rate was 0.95%. The three component groups of the National Civil Construction Cost Index (INCC) registered the following variations from November to December: Materials and Equipment (2.00% to 0.81%), Services (0.49% to 0.61%), and Labor (0.10% to 0.28%).

Prices collected from November 11 to December 10 were compared to those collected from October 11 to November 10.

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