Inflation increases in six of the seven capitals that make up the IPC-S, points out FGV

Gilberto Braga, economist and professor at Ibmec, explains that this index measures the variation in prices and products in seven capitals, measuring the weekly variation in the cost of living for families with incomes between 1 and 33 minimum wages.

“Although the indicator points to an increase in prices, the variation is within the expectations that experts and economists have. We can see that over 12 months, you have a 2.84% increase in the IPC-S. This is really within inflation expectations for the year — and there is even room for some events that we will probably have throughout 2024”, he points out.

Six of the seven capitals surveyed showed increases in their rates of change. Recife was the only one that showed a drop (0.48% to 0.47%).

See the percentage changes per month until April 30th:

• Rio de Janeiro: 0.79
• Belo Horizonte: 0.63
• Recife: 0,47
• São Paulo: 0.43
• Salvador: 0,43
• Brasilia: 0.24
• Porto Alegre: 0.10

Economist Cesar Bergo highlights that some capitals, such as Rio de Janeiro and Belo Horizonte, have shown greater price distortion, creating difficulties for people residing in these cities.

“Several factors can contribute to this increase, so in this case, these inflationary pressures are mainly due to the increase in food prices, which has also compromised the basic food basket. The price of energy is also rising, the prices of medicines have risen — which ends up putting pressure on the price of the healthcare system”, he informs.

Bergo also states that monetary policies, with high interest rates, and heated demand also compromise prices; in addition to exchange rate devaluation, which affects the price of imports.

Trend for the coming months

For Bergo, external events, such as the war in the Middle East and the price of a barrel of oil, could affect prices in the coming months, but he believes that inflation will remain contained, perhaps around 3.5%.

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