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IPCA-15: preview of inflation is 1.17% in November and reaches 10.73% in 12 months



Pulled once again by high gasoline prices, the National Extended Consumer Price Index 15 (IPCA-15), which is a snapshot of the country’s official inflation, stood at 1.17% in November, after registering a rate of 1.20% in October, show the data published this Thursday (25) by the Brazilian Institute of Geography and Statistics (IBGE).

“This is the biggest change for a month of November since 2002, when the index was 2.08%,” IBGE informed.

With the result, the IPCA-15 accumulates an increase of 9.57% in the year and 10.73% in the last 12 months, above the 10.34% recorded during the 12 months immediately preceding. This is the highest rate over a one-year interval since February 2016 (10.84%).

The old official inflation indicator slows from October to November – Photo: Economy / g1

THE Cumulative inflation remains above double the target for the year. The government’s central target for the IPCA in 2021 has been set at 3.75%, and the tolerance range varies from 2.25% to 5.25%. In 2020, official inflation was 4.52%.

oh November’s result is slightly better than expected. The median of the 36 projections studied by Valor Data predicted an increase of 1.12% in November.

  • The financial market begins to forecast inflation above 10% in 2021

Understand how inflation is calculated

Understand how inflation is calculated

Gasoline accumulates at 48% in 12 months

Gasoline was the nastiest in inflation again, peaking at 6.61%, which represented the largest individual impact on the index of the month (0.40 percentage point). In the year, the fuel accumulates a variation of 44.83% and, in 12 months, of 48%.

There were also increases during the month in the prices of diesel (8.23%), ethanol (7.08%) and vehicle gas (2.59%).

  • The price of gasoline is stable after 6 consecutive weeks high

Another price that jumped was that of on-demand transport (16.23%), which had already increased by 11.60% in October. On the other hand, we note a fall in the prices of plane tickets (-6.34%), after significant increases in September (28.76%) and October (34.35%).

Still in Transport, the prices of new (1.92%) and used (1.91%) cars are still on the rise, as are the prices of motorcycles (1.26%).

Snapshot of accumulated inflation over the past 12 months – Photo: Economy / g1

All nine product and service groups surveyed increased in November, according to IBGE.

See below the IPCA-15 result for each of the groups:

  • Food and drinks: 0.40%
  • Housing: 1.06%
  • Residence status: 1.53%
  • Clothing: 1.59%
  • Transportation: 2.89%
  • Health and Personal Care: 0.80%
  • Personal expenses: 0.61%
  • Education: 0.01%
  • Communication: 0.32%

Gas and electricity also in the heights

The biggest change (2.89%) and the biggest impact (0.61 percentage point) came from transport. Next come Housing (1.06%) and Health and Personal Care (0.80%). Together, the three groups contributed 0.88 percentage points to the November CPI-15, which equates to about 75% of the month’s index.

In the Housing group, the largest contribution came from bottled gas (4.34%), whose prices increased for the 18th consecutive month, accumulating an increase of 51.05% over the period starting in June 2020.

Electricity rose 0.93% in November, but saw a smaller change than in October (3.91%).

Economist Samuel Pessôa comments on high inflation

Economist Samuel Pessôa comments on high inflation

In the latest Central Bank Focus survey, financial market analysts raised inflation expectations for 2021 to 10.12%. This was the 33rd consecutive week of increase. If this is confirmed, it will be the first time that inflation has reached double-digit levels since 2015 – when the IPCA was 10.67%.

For 2022, the inflation projection has increased to 4.96%. Next year, the central inflation target is 3.50% and will be officially met if the index fluctuates from 2% to 5%. As a result, the estimate gets closer and closer to the cap of the target system.

High inflation keeps the pressure on the Central Bank for further increases in the base interest rate (Selic), currently at 7.75% per annum. The market projects a Selic rate at 9.25% per year at the end of 2021. At the end of 2022, financial market economists raised the expectation of the Selic rate from 11% to 11.25% per year, which assumes a rate of higher interest in the economy next year.

The deterioration in the projections of economic indicators was mainly affected by uncertainties over the trajectory of public accounts and fiscal responsibility in the face of maneuvers and proposals underway in Congress to bypass the expenditure ceiling and make room in the budget to finance expenses like that of Brazil Aid of 400 BRL for the election year 2022.

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Focus Bulletin: Inflation estimate exceeds 10% for the first time

Focus Bulletin: Inflation estimate exceeds 10% for the first time

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