August’s IPCA registered a deflation of 0.02%, below Bloomberg’s consensus (0.01%) and in line with our projection. This result leads to a 12-month accumulated inflation rate of 4.24%.
The decrease compared to IPCA-15 (0.19%) was mainly driven by gasoline (-14bps) and electricity (-9bps). On the other hand, food at home increased by 9bps, mainly due to fresh food (+6bps) – particularly fruits. Regarding our figure, these were isolated surprises in volatile items, which therefore balanced each other out.
In terms of composition, the result was more favorable, both looking at the average of the core inflation and underlying services. Highlights include the decreases in food away from home, banking services, and cinema, theater, and concerts (-1bp each) – although underlying services rose over 12 months (to 5.06%). In the seasonally adjusted metrics, there was also widespread deceleration on the margin.
It’s worth mentioning that underlying services came in below our expectations, even though they were close to the lower bound of projections. Additionally, the average of the core inflation measures also came in below market expectations.
For more information, please check our IPCA Report.
