Inflation rose 0.53 percent in February, weighing on Brazil’s earnings

The expanded national consumer price index (IPCA) increased by 0.84% ​​in February this year. Compared to the previous month, the index accelerated, as the variation in January was 0.53%. By the way, it’s the IPCA Brazil’s official inflation rate.

In other words, it is inflation general price increase about goods and services in the economy.

So when the general price level rises, money buys fewer goods and services. That is what is happening right now.

According to the IBGE, the main purpose of the IPCA is to “measure inflation of a range of goods and services sold at retail for personal consumption by households that income ranges from 1 to 40 of the minimum wagewhatever the source of income.’

The Brazilian Institute of Geography and Statistics (IBGE), which is responsible for the survey, released the information on March 10.

By the way, the result was slightly higher than expected by financial market analysts, whose average forecast showed inflation of 0.78% in February.

With this result added, the IPCA’s accumulated volatility over the last 12 months lost some strength, changing from 5.77% to 5.60%.

Although retreated on an annualized basis, the rate remains above the National Monetary Board’s (CMN) central target of 3.25% for 2023.

However, it’s worth noting that the pace can slow down more throughout the year.

The price increases continue to spread throughout the country

IBGE found that eight out of nine groups of goods and services surveyed saw price increases in February, the same as in the previous month.

Of particular importance was the education group, whose strong swing had a more significant impact on inflation in Brazil last month.

Check below the variations recorded by the groups surveyed by IBGE:

  • Education: 6.28%
  • Health and Personal Care: 1.26%
  • Communication: 0.98%
  • Apartment: 0.82%
  • Personal expenses: 0.44%
  • Transport: 0.37%
  • Food and drink: 0.16%
  • Household goods: 0.11%
  • Clothing: -0.24%

IBGE has revealed that In February, the education group had the biggest impact on the IPCAaffecting inflation by 0.35 percentage points (p.m.).

In summary, group prices have increased due to adjustments that are usually applied at the beginning of the school year.

Even more important were regular courses, whose prices rose by 7.58% over the month, driven by secondary education (10.28%), primary education (10.06%), pre-school (9.58%) and day care ( 7.20%) to the account.

The largest individual effect in the group came from the elementary school subscale, which affected the IPCA by 0.15 percentage points.

Increases were also recorded in higher education (5.22%), technical (4.11%) and postgraduate (3.44%) sectors.

“February always stands out for education, because the revisions made by educational institutions at the end of the year are calculated in that month. Normally, this increase in education is indexed to the IPCA itself, meaning that the tuition fee readjustment is based on the previous year’s inflation,” explained survey leader Pedro Kislanov.

Other groups also stand out

It was the group with the second largest impact on inflation in February health and personal careContributing 0.16 pp to IPCA growth during the month.

In short, personal care products rose 2.80 percent, boosting the group.

At the same time, perfumes, whose prices decreased by 5.86% in January, rose by 7.50% in February, contributing to the monthly index by 0.08 percentage points.

The housing group had the third biggest impact in February, contributing to a 0.13 percentage point increase in the IPCA. In particular, residential electricity (1.37%) had the main impact, which boosted inflation by 0.05 percentage points in one month in Brazil.

This was the same effect as gasoline, up 0.05 percentage points in February. Fuel was the only one to rise in price for the month (1.16%), with a bigger impact than declines in ethanol (-1.03%), auto gas (-2.41%) and diesel (-3.25%) sum.

Inflation is rising in all 16 locations surveyed

In February, the IPCA increased in all 16 surveyed sectors, which recorded an increase in the prices of goods and services.

The widespread prepayment shows that Brazilians had to spend more to buy goods or hire services in February compared to January.

Check below the inflation rates recorded in the surveyed locations in February.

  • Curitiba: 1.09%
  • Recife: 0.99%
  • Win: 0.92%
  • Sao Paulo: 0.92%
  • Aracaju: 0.88%
  • Bethlehem: 0.86%
  • Goiania: 0.85%
  • El Salvador: 0.81%
  • Belo Horizonte: 0.81%
  • Porto Alegre: 0.75%
  • Strength: 0.73%
  • San Luis: 0.65%
  • Rio de Janeiro: 0.65%
  • Campo Grande: 0.54%
  • Brazil: 0.48%
  • Rio Branco: 0.44%

The highlight of February was Curitiba, which topped the national rankings, posting the lowest rate in January of all locations surveyed.

In the capital city of Paraná, inflation was driven by increases in regular rates (5.97%), gasoline (3.37%) and residential electricity (5.94%).

“The lowest fluctuations were recorded in Rio Branco (0.44%), which affected the 2.04% drop in residential electricity,” IBGE said.

The clothing group is limiting high inflation

Last month, only the clothing group had a negative change, as was the case in January.

The 0.24% decline in the prices of goods and services related to the group affected the IPCA by -0.01 percentage points, that is, it did not have such a significant impact.

In any case, this was the only group that recorded a drop in prices in a month, slightly limiting inflation in the country.

It should be noted that the prices of the clothing group have fallen for the second month after 23 consecutive price increases.

By the way, until 2023, the last time the group closed a month with a decline was in January 2021, when prices retreated by 0.07%. “This group has been growing for a long time.

It is natural, therefore, that the prices start to decrease,” said Pedro Kislanov.

Finally, the items that fell the most in February, narrowing the group’s swing, were men’s (-0.58%) and women’s clothing (-0.45%) and jewelry (-0.72%).

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