Inflation slows down, closes November at 0.39%
Brazil's official inflation slowed between October and November, closing the month at 0.39 percent. This marks a decrease from October's Broad National Consumer Price Index (IPCA), which stood at 0.56 percent.
The data, released on Tuesday (Dec. 10) by the government´s statistics agency IBGE, show a deceleration in inflation. This does not indicate a drop in prices but rather a slower pace of increases. In November, food costs exerted the most significant pressure on the IPCA.
Over the past 12 months, official inflation reached 4.87 percent, exceeding the government's target of 3 percent, with a tolerance range of ±1.5 percentage points. Year-to-date, from January to November, the IPCA has risen by 4.29 percent.
“If the IPCA exceeds 0.20 percent in December, it will surpass the target,” estimates André Almeida, manager of the survey.
In November, the food and beverage category increased by 1.55 percent, contributing 0.33 percentage points to overall inflation. The largest contributor was meat, which surged by 8.02 percent, accounting for a 0.20 percentage point impact on the index.
“The reduced availability of animals for slaughter, combined with increased export volumes, led to a decrease in the domestic supply of the product,” explained André Almeida, the survey manager.
Another factor driving inflation in November was transportation, which increased by 0.89 percent, contributing 0.13 percentage points to the overall IPCA. The main driver was the 22.65 percent surge in airline ticket prices, which saw the largest price increase among all products and services tracked by IBGE.
"The approach of the year-end and the numerous holidays in the month may have contributed to this increase," said Almeida.
On the positive side of November's inflation, fuels saw a 0.15 percent decrease, driven by declines in the prices of ethanol (-0.19%) and gasoline (-0.16%).
Housing costs experienced negative inflation in November, with a 1.53 percent decrease, contributing 0.24 percentage points to the IPCA. This was mainly driven by a 6.27 percent drop in residential electricity prices, attributed to the yellow tariff flag on electricity bills in November, compared to the red tariff flag in the previous month.
The IPCA tracks the cost of living for households with incomes ranging from one to 40 minimum wages, with price data collected across the 10 largest metropolitan regions in the country.
The IPCA's performance is a key indicator for the country's basic interest rate, the Selic, which is set by the Brazilian Central Bank's Monetary Policy Committee (Copom).
