The IPCA-15 (inflation forecast) for August registered deflation of 0.73%, the lowest rate in the historical series started in November 1991, informed the IBGE on Wednesday (24/08).
What pulled the index down?
The sectors that helped to control inflation were transport (-5.24%) and housing (-0.37%), which had already brought down July’s inflation. In the preview of August, the communication sector had also retreated (-0.30%). The three groups that fell were influenced by the tax reduction brought about by the ICMS ceiling on fuel, energy, transport, and telecommunications.
Sectors with Negative Impact
However, food inflation continues to worry. In the IPCA-15 of August, the food and beverages group rose the most (1.12%). The result was influenced by the prices of milk, which increased by 14.21% in the period.
Final Results by September
The IPCA-15, as it was released earlier, signals a trend for prices. It is usually calculated between the second half of the previous month and the first half of the reporting month. The full index for the month of August will be released on 9 September and should also register deflation. The market expectation is that the IPCA will end the year at 6.82%.
Unequal Results Across the Country
The preview of accumulated inflation in 12 months was still above double digits in 4 of the 11 capitals and metropolitan regions surveyed by the IBGE in August.
Risk
For analysts, behind the increasing living costs across the globe after the Pandemic, especially in Latin America, it is the considerable risks of socioeconomic instability that can appear in the form of governmental crisis, nationwide protests, and strikes. Similar events are already taking place in Argentina and Panama and other neighboring nations. Brazil passed through such events in 2013, 2014 and in 2018. Thus, a recent historic of turmoil gives even more precedent to potential events.
