The coordinator of the Consumer Price Index at the Economic Research Institute Foundation (IPC-Fipe), Guilherme Moreira, reduced the estimate for the variation of the indicator at the end of the year, from 4.0% to 3.5%.
The downward revision was consolidated after the release of the IPC-Fipe result for October, which accelerated to 0.30%, after ending September at 0.29%, as announced by the foundation this Friday morning, 3. With the result , the index accumulates an increase of 2.31% in the year until October. The month’s result was within the range of estimates collected by Projeções Broadcast, from 0.23% to 0.41%, but exceeding the median of 0.25%.
Among the highlights of the downward revision, Moreira cites the behavior of the electricity item, which ended October with a decline of 4.26%. “It came in lower than expected. It is also important to say that, throughout the year, energy tariffs had lower variations in São Paulo, which also explains why the IPC-Fipe should close the year below other inflation indices, such as the IPCA”, highlights Moreira. The IPC-Fipe measures inflation only in the city of São Paulo.
Regarding this Friday’s release, Moreira highlights that the main news was the return of the Food group to positive territory (-0.78% to 0.73%). In the coordinator’s assessment, the movement was already expected, and is in line with the end-of-year seasonality. “What was strange was the delay for this effect to arrive; food products had been falling sharply for a long time,” he says.
Moreira mentions that, in addition to the upward pressure on items in nature, which are experiencing poor production seasonality at the end of the year, there was also a start to a return in the price of meat cuts, which had been falling. “It is also seasonality at the end of the year, due to the increase in meat consumption due to holidays and end-of-year celebrations.”
Moreira’s preliminary scenario for the IPC-Fipe is an acceleration of 0.40% in November, followed by a further increase, of around 0.7%, in December.