With the pressure of more expensive gasoline, the preview of official inflation in Brazil advanced 1.17% in November. It is the biggest variation for the month since 2002, informed this Thursday (25th) the IBGE (Brazilian Institute of Geography and Statistics).
The data is part of the IPCA-15 (National Consumer Price Index 15). In October, the indicator had registered an even higher rate, of 1.20%.
The November variation was slightly above financial market projections. Analysts consulted by Bloomberg agency expected 1.13% increase in the median.
With the result of November, the preview of inflation reached 10.73% in the accumulated of 12 months. It is the biggest brand for this range since February 2016 (10.84%). Until October 2021, the accumulated was at 10.34%.
The country’s official inflation index is the IPCA (Extended National Consumer Price Index), also calculated by the IBGE.
The IPCA-15, as it was released earlier, signals a trend for prices. Hence, it is known as a preview.
In 12 months, the IPCA-15 is more than double the ceiling of the inflation target pursued by the BC (Central Bank) for the IPCA. The target ceiling in 2021 is 5.25%. The center is 3.75%.
In the view of economists, the November data put more pressure on the Copom (BC Monetary Policy Committee), which started to raise the basic interest rate, the Selic, to try to contain inflation.
The next meeting of the collegiate is scheduled for the 7th and 8th of December. This is the last Copom meeting in 2021.
Currently, the Selic is at 7.75% per year. For 2022, there are already economists who see the rate close to 12%.
“The situation is serious. It will require a stronger action from the BC, because inflation will not die alone. We have risks of new transfers to prices in the coming months”, points out economist Reginaldo Nogueira, director-general of Ibmec-SP and Brasilia. “The result of the preview of inflation puts more pressure on the Copom.”
In November, all nine groups of products and services surveyed by the IBGE had increased prices, according to the IPCA-15. The biggest change (2.89%) and the main impact on the index (0.61 percentage point) came from transport.
In this group, there was the influence of gasoline, which increased by 6.62%. Fuel registered the biggest individual impact on the IPCA-15 (0.40 percentage point).
This year, gasoline accumulates an increase of 44.83%. In 12 months, the increase is even greater, at 48%.
Another highlight in November was transport per application, which rose 16.23%, after increasing 11.60% in October.
On the other hand, there was a reduction in the prices of airline tickets (-6.34%), after strong increases in September (28.76%) and October (34.35%).
After transport, the groups that most impacted the IPCA-15 were housing (1.06%), health and personal care (0.80%). The weights in the November index were 0.17 percentage points and 0.10 percentage points, respectively.
In housing, the largest contribution came from bottled gas (4.34%). The item’s prices rose for the 18th consecutive month, accumulating a 51.05% increase in the period starting in June 2020.
Electricity (0.93%), in turn, had a lower variation than in October (3.91%). It contributed 0.05 percentage point to this month’s index.
Since September, the country has been living with the water scarcity tariff flag, which adds R$ 14.20 to the electricity bill for every 100 kWh (kilowatt-hour) of consumption.
The health and personal care group was influenced by personal hygiene (1.65%) and pharmaceutical products (1.13%).
“The IPCA-15 confirms a very negative perception for inflation in Brazil. We look not only at the strong impact of gasoline, we see inflation in almost all items”, says the chief economist of Banco Ourinvest, Fernanda Consorte.
“The bets for BC should be to increase the pace of adjustment of the Selic at the meeting in early December. We have a very bad scenario for 2022.”
Escalating inflation took shape throughout the pandemic. After paralyzing global supply chains, Covid-19 created bottlenecks in the supply of inputs in different sectors.
The result of the scarcity of raw materials was the rise in prices on the international market.
In Brazil, this cost pressure was intensified by the devaluation of the real against the dollar. Amid tensions in the political area and fiscal uncertainties, the Brazilian currency was weakened in comparison with the American one.
The exchange rate is one of the criteria used by Petrobras to define fuel prices at its refineries. Therefore, when rising, the dollar impacts items such as diesel and gasoline in Brazil.
In addition to the rise in fuel prices, which makes the transport of goods and passengers more expensive, the country was also affected this year by the water crisis.
The lack of rain forced the activation of thermal plants, with higher costs for electricity generation. The result is the highest electricity bill in Brazilian homes.
The drought also hampered the planting and harvesting of different crops in the country, putting pressure on the final price of food even on supermarket shelves.
Market analysts have been raising projections for the IPCA. The most recent estimate that appears in the Focus bulletin, released by BC on Monday (22), indicates an advance of 10.12% at the end of 2021.
The projection reached double digits after the market saw greater fiscal risks for Brazil.
The threat to the direction of public accounts became clearer at the end of October, after the federal government called into question the spending ceiling to pay for parliamentary amendments and also increase the value and number of beneficiaries of AuxÃlio Brasil, the Bolsa’s replacement Family.
Fiscal uncertainty is considered a factor that could drive investors away from the country, reinforcing the devaluation of the real against the dollar.
Economist Fabio Astrauskas, managing partner of Siegen Consultoria, recalls that price increases this year also represent a threat to inflation in 2022.
This risk exists because different contracts are readjusted for inflation from previous periods.
“There is inflationary inertia. In other words, past inflation feeds future one,” he says. “This makes fighting price increases more difficult,” he adds.
According to data from the IPCA-15, 7 of the 11 capitals and metropolitan regions covered by the survey had prior double-digit inflation accumulated through November.
Curitiba (PR) registers the biggest increase: 13.69%. BrasÃlia (DF) is at the other end of the list, with the lowest accumulated inflation, 9.77%. In São Paulo (SP), the variation was 9.82%, the second lowest, although it remains close to 10%.
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