General Price Index in Brazil Accumulates Inflation of 6.44 Percent in 12 Months

By Contributing Reporter

RIO DE JANEIRO, BRAZIL – The General Price Index – Market (IGP-M), used in the readjustment of rental contracts, rose 0.73 percent in the first half of this year. According to the Getulio Vargas Foundation (FGV), the rate is higher than that recorded in the first preliminary in May (0.58 percent). With the preliminary results for June, the IGP-M accumulated inflation of 6.44 percent in 12 months.

The drop in the rate from May to June was driven by retail and construction. The Consumer Price Index, which measures retail, registered deflation (price drop) of 0.09 percent in June, against inflation of 0.35 percent in May.

The National Construction Cost Index also registered deflation (-0.07 percent) in June, below the 0.09 percent inflation rate in the same period.

By contrast, the Broad Producer Price Index, which measures wholesale prices, registered an increase in the inflation rate, rising from 0.74 percent in May to 1.15 percent in June.

The IGP-M is the Market General Price Index calculated by the Fundação Getúlio Vargas (FGV). The collecting of prices is carried out between the 21st of the previous month and the 20th of the current month and it is published on the 30th of the current month It is composed of three indexes: Wholesale Prices Index (IPA), Consumer Price Index (IPC) and Construction Cost National Index (INCC) that represent 60 percent, 30 percent and 10 percent respectively of the IGP-M.