Inflation increases in five of the seven capitals that make up the IPC-S, according to FGV

Economist Ana Cláudia Arruda, federal advisor to Cofecon, highlights that five of the seven capitals surveyed recorded an increase in variation rates, with emphasis on Belo Horizonte, Salvador, Recife, São Paulo and Porto Alegre.

See the percentage changes per month until May 7th:

• Rio de Janeiro: 0.68
• Belo Horizonte: 0.66
• Recife: 0,50
• São Paulo: 0.47
• Salvador: 0,51
• Brasilia: 0.13
• Porto Alegre: 0.29

“Several factors contribute to this increase. Inflationary pressures arise, above all, from rising food prices, which also severely compromise the basic food basket. On the other hand, monetary policy with high interest rates and heated demand compromise many domestic prices. Furthermore, currency devaluation also affects import prices”, points out Arruda.

Economist José Luiz Pagnussat, former president of Corecon-DF, explains that this increase in consumer prices was already expected, especially due to the intense rains that hit Rio Grande do Sul.

He explains that Rio Grande do Sul is responsible for 70% of national rice production. As some of the grain had not been harvested, it is now lost underwater. With part of the state’s harvest being lost, he highlights that there is now a problem of reduced supply of various products, and with less availability prices tend to rise.

“But there are also international problems, which ended up putting pressure on some prices. So this reflects some of this turbulence. The normal thing in the months of May and June is to have prices falling at the consumer level,” he explains.

The economist points out that, in these months in which Brazil would seasonally have a price reduction, the prospect is for an increase in values.

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