Brazil’s general price index increases 0.18% in July, accumulates 15.52% hike this year

RIO DE JANEIRO, BRAZIL – The General Price Index – 10 (IGP-10) slowed down its rise to 0.18% in July, after having increased 2.32% in June, informed the Getulio Vargas Foundation (FGV) on Friday, 16.

The result was within the estimates of financial market analysts, which expected from a drop of 0.46% to an advance of 0.28%. However, it was above the positive median of 0.15%.

As for the three indicators that make up the IGP-10 for July, wholesale prices as measured by the IPA-10 dropped 0.07% in the month, compared to a 2.64% increase in June. Consumer prices as measured by the IPC-10 showed a 0.70% increase in July, after a 0.72% advance in June.

The INCC-10, which measures civil construction prices, rose 1.37% in July, after climbing 2.81% in June.

The IGP-10 has accumulated a 15.52% increase this year. The 12-month rate stood at 34.61%. The price collection period for the July indicator was from June 11 to July 10.

The hikes in airfares (26.99%), electricity (3.86%), and gasoline (1.42%) helped sustain consumer inflation in the July IGP-10.

But within the IPC-10, six of the eight categories of expenses registered lower variation rates: Transport (from 1.69% in June to 0.81% in July), Health and Personal Care (from 0.30% to -0.24%), Housing (from 1.41% to 1.17%), Clothing (from 0.83% to 0.34%), Miscellaneous Expenses (from 0.26% to 0.18%), and Communication (from 0.10% to 0.04%).

The main contributions came from the following items: gasoline (from 3 16% to 1.42%), health insurance (from 0.86% to -1.27%), residential water and sewerage fees (from 2.08% to -0.04%), clothing (from 1.06% to 0.47%), pet food (from 2 70% to 1.24%), and streaming services (from 2.16% to 0.54%).

In the opposite direction, there was an increase in the rates of the Education, Reading and Recreation (from -0.76% to 2.23%) and Food (from 0 21% to 0.45%) groups. The biggest influences came from the following items: airfare (from -8.95% to 26.99%) and fruit (from -7.08% to -2.20%).

IGP-10

General Price Index 10 from Fundação Getúlio Vargas is prepared using the same methodology as IGP only changing the price collection period: between the 11th of one month and the 10th of the following month.

The General Price Index, calculated by Fundação Getulio Vargas, is a weighted average of the Wholesale Price Index (IPA) – weight 6; the Consumer Price Index (CPI) in Rio de Janeiro, São Paulo, Belo Horizonte, Salvador, Recife, Porto Alegre, and Brasília – weight 3; and the Construction Cost Index (INCC) – weight 1. it is used in longer term contracts, such as rent.