Despite pressure from increases in air tickets and food, a decline in the price of gasoline helped keep official inflation in check in the country in October. Announced this Friday (November 10) by the Brazilian Institute of Geography and Statistics (IBGE), the Broad National Consumer Price Index (IPCA) increased from 0.26% in September to 0.24% last month.
After three consecutive months of rally, the 12-month accumulated rate also cooled: it rose from 5.19% in September to 4.82% last month, which is close to the range of the inflation target set by the Central Bank for this year – index is 3.25%, with a tolerance limit of 4.75%.
In October, price increases across the items surveyed were widespread, including food, which became more expensive after four months of cuts. However, inflation was largely concentrated in the 23.70% increase in air tickets, which accounted for practically 60% (0.14 percentage points) of the entire IPCA for the month.
“This increase may be related to some factors, such as the increase in the price of fuel, aviation kerosene, and the proximity of holidays and year-end holidays,” said Andre Almeida, manager of the IBGE national price index system. ,
On the other hand, a 1.53% decline in gasoline helped control inflation in the month, removing 0.08 percentage points from the IPCA. Fuel was 1.39% cheaper on average in October. In addition to gasoline, automobile gas (-1.23%) and ethanol (-0.96%) also fell. Diesel oil increased by 0.33%.
The result was lower than predicted by financial market analysts interviewed by Projekt Broadcast, who had expected inflation to average 0.29% in October. With a more favorable outlook, economists this Friday revised this year’s inflation projections downwards.
C6 Bank cut its IPCA forecast this year to 4.8% from 5.2%, while brokerage Guide Investimentos cut it to 4.66% from 4.82%. Broker Warren Investimentos predicted inflation could fall below its estimated 4.5% due to the possibility of new price cuts in gasoline.
For Alexandre Maluf, economist at XP Investimentos, if it were not for fiscal uncertainties and rising interest rates in the United States, the Central Bank’s Monetary Policy Committee (COPOM) would have had the time to accelerate the pace of lowering the key interest rate. Selik, currently at 12.25% p.a. According to him, IPCA data for October confirm that “the second phase of deflation in Brazil has proceeded much faster than expected.”
“Nevertheless, we maintain our forecast that COPOM will act cautiously and cut rates by 0.50 pp (percentage points) at the next meetings,” Maloof said in a report, which forecast inflation of 4.5% at the end of 2023. Has gone. To 3.9% in 2024.
After continued decline, foods are readjusted
Excessive crop rains and high export demand limited supplies of some food items in October, ending a streak of four consecutive months of falling food prices from June to September.
Andre Almeida, manager of the IBGE national price index system, said, referring to such commodities, “Increasing the amount of rain causes crop damage and reduces the supply of product in the market, causing prices to rise.” As for potatoes and onions, which became more expensive in October.
The food and beverages group rose 0.31% in October. Food consumption at home increased by 0.27% in the month, after a decline in the previous four months. In October, households paid more for potatoes (11.23%), onions (8.46%), fruits (3.06%), rice (2.99%) and meat (0.53%). Long-lived milk (-5.48%) and chicken eggs (-2.85%) became cheaper.
Almeida said the supply of rice and mangoes has also decreased due to over-exporting of these products, at a time when demand in the domestic consumer market remains stable.
Despite the increase in October, the food and beverages group still recorded a decline of 0.70% on the year, that is, it became cheaper from January to October 2023. Food purchased in supermarkets accumulated a decrease of 2.56% over this period.
Meat prices have declined by 11.08% from January to October, poultry and eggs have declined by 8.06%, while oils and fats have already declined by 17.51%.
Prices of tubers, roots and vegetables declined by 14.54% in the year. And carioca beans recorded a decline of 23.11%. (state institution)