By Anna Kaiser, Contributing Reporter
RIO DE JANEIRO, BRAZIL – President Dilma Rousseff affirmed that inflation is “completely under control” yesterday on a radio show in Minas Gerais as consumer price index rates (IPCA) – Brazil’s broadest measure of inflation – rose by a mere .03 percent in the month of July. That is the lowest IPCA in three years, according to the Brazilian Institute of Geography and Statistics (IBGE).
The Broad Consumer Price Index (IPCA in Portuguese) measures the changes in prices of a standard package of goods and services which Brazilian households purchase for consumption.
Experts attribute the unusually low inflation rate to abnormal circumstances, namely the reversal of public transportation fare increases following massive countrywide protests. The 3.32 percent decrease in bus fares was cited as the largest single factor for last month’s unusually low CPI.
Another factor behind the low CPI could be World Youth Day Catholic event, which drew a reported three million people and brought around US$796 million to the economy. The U.S. dollar’s consistent value over the last several months was also mentioned as a contributing factor.
While President Rousseff claimed inflation is under control, experts expect to see CPI return to normal rates of five to seven percent in August.
Household expenses went virtually unchanged in July, after seeing consistent increases in goods, such as food, for the past year – 5.67 percent increase in the past six months and an 11.42 percent increase in the past twelve months.
Even though numbers for July were positive, worries over inflation among Brazilians is at its highest level since 2001, according to a National Confederations of Industry survey released last week. Brazil’s IPCA for 2012 overshot the government’s 4.5 percent target rate, coming in at 5.4 percent.
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