Official Inflation for Month of July is Lowest in Five Years

RIO DE JANEIRO, BRAZIL – The Broad National Consumer Price Index (IPCA), which measures the country’s official inflation, stood at 0.19 percent in July. The rate is higher than the 0.01 percent of June but lower than the 0.33 percent of July 2018.

This is the lowest inflation for the month since 2014 (0.01 percent). The data was released August 8th, in Rio de Janeiro, by the Brazilian Institute of Geography and Statistics (IBGE).

The IPCA inflation index has risen 2.42 percent for the year and 3.33 percent for the last twelve months, well below the Central Bank’s target of 4.25 percent.

Spending on housing, which climbed 1.20 percent, was primarily responsible for July’s 0.19 percent inflation. Electricity, up 4.48 percent, accounted for the group’s heaviest share.

Energy costs were more expensive as a result of the yellow flag extra tax and readjustments in public utilities in São Paulo, Curitiba, and Porto Alegre. Water and sewage tariffs were also more expensive for consumers (0.73 percent).

Deflation (price drops) of 0.17 percent in transportation and 0.52 percent in clothing prevented inflation from rising in July. In terms of deflation in transportation, fuels had a major impact, with a 2.79 percent drop in prices.

Gasoline, for instance, retreated 2.80 percent. In clothing, the main prominence was women’s clothing, which cost 1.39 percent less. Foodstuffs registered inflation of only 0.01 percent.