Driven by the increase in fuel and food prices, the official inflation index in Brazil rose by 0.41% in November, according to the IBGE (Brazilian Institute of Geography and Statistics) this Friday (9).
It is the second consecutive month of elevation of the IPCA (National Index of Consumer Prices). The indicator, however, shows a deceleration compared to October, when it had risen by 0.59%.
The new result was also below financial market projections. Analysts consulted by the Bloomberg agency projected a high of 0.53% last month.
In the accumulated of 12 months, the index decelerated to 5.90% in November. The advance was 6.47% until the previous release.
Of the 9 groups of products and services surveyed, 7 were discharged in November. The major impacts on the index for the month came from transportation (0.83%) and food and beverages (0.53%), with 0.17 percentage points and 0.12 percentage points, respectively.
Together, the two groups contributed around 71% of the November IPCA. The biggest change, in turn, came from clothing (1.10%), whose result was above 1% for the fourth consecutive month.
The increase in transport was caused, mainly, by the increase in fuel prices (3.29%), which in October had fallen by 1.27%.
The prices of ethanol (7.57%), gasoline (2.99%) and diesel oil (0.11%) rose in November. The exception was vehicular gas, with a drop of 1.77%. Gasoline exerted the greatest individual impact on the index for the month, with 0.14 percentage points.
The accumulated IPCA is heading towards breaking the inflation target pursued by the BC (Central Bank) for the second consecutive year. In 2022, the target has a center of 3.50% and a ceiling of 5%.
The scarcity of goods and services in the election year made President Jair Bolsonaro (PL) bet on tax cuts on items such as fuel.
The relief generated by the reduction of ICMS rates (state tax) took the IPCA down on the eve of the presidential elections, won by Luiz Inácio Lula da Silva (PT).
The index fell in three consecutive months – July (-0.68%), August (-0.36%) and September (-0.29%). The effect of the tax cuts, however, lost steam in the final stretch of the year, and inflation rose again in the country.
The scarcity of products such as food mainly affects the pockets of the poorest. This portion of the population spends a larger share of the budget, in relative terms, on food purchases.
On the median, financial market analysts project IPCA of 5.92% in the accumulated 12 months until December, according to the Focus bulletin released by BC on Monday (5).
For 2023, the forecast is for an advance of 5.08%, also according to Focus. Analysts are still waiting for more details of the economic policy of the next Lula administration.
The market has already shown concern about possible expenses from the new management. The fear of investors came to put pressure on the dollar, which usually brings risks to inflation. In 2023, the Lula government will also have to analyze whether or not to return taxes on fuel.
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