- The IPCA for September recorded an increase of 0.44% m/m, below market expectations (0.46%) and above our forecast (0.39%). Over 12 months, the total index rose by 4.42%. It’s worth noting that today’s figure represents a -13bps surprise for the Central Bank of Brazil (RTI Sep: 0.57% m/m).
- Quality was almost in line with our expectations but significantly better than the market’s forecast. Services (0.15% m/m) and underlying services (+0.02% m/m) matched our projection, which was close to the lower bound of forecasts. The Average Core Inflation was 0.22% m/m,* slightly above our forecast (0.20% m/m) but below the market’s projection (0.27% m/m).
- Within core items, there was an even greater deflation in cinema, theater, and concerts, surprising by -2bps (-8.75%, against -5.77% in IPCA-15), offset by a positive surprise in car repairs (+1bp).
- Regarding our forecast, the main surprises came from meat (+3bps), personal hygiene (+2bps), gasoline (+1bp), and car repairs (+1bp).
- Compared to the IPCA-15, highlights include increases in electricity (+18bps), food at home (+9bps), mainly driven by meat (+3bps) and fresh produce (+2bps), and gasoline (+3bps).
For more information, please check our IPCA Report.
