IGP-M rose 0.02% in November with lower wholesale prices

The IGP-M (General Market Price Index), also known as rent inflation, rose 0.02% in November, reaching 17.89% in 12 months, the FGV (Foundation) reported on Monday (29th). Getulio Vargas).

With this month’s result, the index has been decelerating for six months, after reaching a peak in May, when it reached 37.04% in 12 months, the highest in the historical series of the Ibre (Brazilian Institute of Economics) from FGV. In October, the IGP-M registered a variation of 0.64% and stood at 21.73% in a one-year period.

In November, according to FGV, the result was mainly influenced by the drop in the prices of wholesale products, which helped to contain the effect of the rise in fuels, such as diesel and gasoline.

For those who have a rental contract adjusted by the IGP-M, the accumulated variation until November will be applied to those whose birthdays are in December. Therefore, if the owners decide to fully apply the index, a rent of R$3,000 will change to R$3,536.70 in January.

Even with the prediction of correction by the index, property owners are not required to fully correct the lease values.

Since last year, when the variation in the IGP-M soared amid the economic crisis resulting from the pandemic, property managers report an increase in the number of negotiations between lessors and lessors.

Starting this year, the distance between the IGP-M and the official inflation (IPCA) has been decreasing because, on the one hand, the rent index has been decelerating, while the official price indicator is rising. In 12 months until October, the IPCA was at 10.67%.

The rise in the IGP-M was mainly due to the increase in the price of dollarized products, such as commodities, which end up having little relationship with the real estate market, which led to numerous questions about the rationality of using the index to reset rents.

The biggest weight in the composition of the IGP-M is an inflation index for products to the producer, which measures the variation in wholesale prices. In the 12 months until November, it accumulates a high of 20.51%. This index, the IPA, corresponds to 60% of the IGP-M.

In November, the IPA was negative by 0.29%, thanks to the drop in the prices of raw materials (-4.84%), a group of expenses that includes the main commodities exported by Brazil, such as iron ore. iron (down 15.15% in November) and soybeans (-2.85%).

André Braz, coordinator of price indices at Ibre, also highlights the variation in corn (-5%). The fall in the prices of these products favored the maintenance of inflation for producers in negative territory, according to him, despite the rise in fuel prices. Diesel rose 9.96% and gasoline 10.17%.

The IGP-M still has two other parts. The IPC (Consumer Price Index) has a similar structure to the IPCA (which is calculated by the IBGE) and the INCC (National Construction Cost Index).

The first accounts for 30% of rent inflation and accumulates a high of 9.73% until November. In the CPI, fuels were also the main highs in November. Gasoline rose 7.14%, ethanol, 9.15%, and gas cylinders, 2.75%.

The construction index is equivalent to only 10% of the IGP-M and is at 14.69% in 12 months. In November, the main increases were in the prices of elevators (2.03%), electrical conductors (4.26%) and mortar (2.15%).

In the Chamber of Deputies, a bill wants to replace the IGP-M with the IPCA. Since the end of October, the text awaits a call on the parliamentary voting agenda.

Regardless of the legislation on the subject, tenants with a contract in progress should try to negotiate their contracts. The tenancy law provides that contracts must have an annual correction rate, but it does not fix what it is. Therefore, even the correction can be negotiated between the parties.

In São Paulo, new rental contracts have registered values ​​lower than a year ago, according to a survey by SecoviSP (housing union). In 12 months in October, the change was negative by 0.08%.