Inflation slows down in six of the seven capitals surveyed by the FGV IBRE IPC-S

The IPC-S (Weekly Consumer Price Index) slowed down in six of the seven surveyed capitals, in the second measurement carried out in April – despite the accumulation of a 3.46% rise in prices over the last 12 months. The information is from the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV IBRE). In the first measurement of April, the index had registered a 0.70% increase in inflation and now, in the second measurement of the month, it recorded 0.52%.

According to the Institute, Recife was the only researched capital that presented a drop in the price indicator, while Rio de Janeiro and Porto Alegre presented the greatest positive variations. The IPC-S was also surveyed in Brasília, Belo Horizonte, Salvador and São Paulo. The prices of nine categories of products consumed by Brazilians were researched: “Food”, “Housing”, “Clothing”, “Health and Personal Care”, “Education”, “Reading and Recreation”, “Transport”, “Communication” and “Miscellaneous Expenses”.

For the economics professor at Ibmec Brasília, Renan Silva, the decrease in the inflation rate is due to the drop in economic activity, caused mainly by the interest rate policy implemented by the Central Bank and by the high indebtedness of families. These two factors, according to him, prevented prices from continuing to advance at the speed they had previously been.

Indebtedness and interest

“We now have a perception that the monetary policy is actually fulfilling its objectives, in the sense of controlling inflation”, declared Renan Silva, adding that, at the same time, a reduction in growth is perceived, through these indicators of inflation. “The slowdown is also due to the high level of household debt, which is at record levels, contributing to lower economic activity”, emphasizes the professor.

Gasoline

The coordinator of the FGV IBRE Price Indices, André Braz, explains that the IPC-S registered that the price of gasoline has been stabilizing since last month. The specialist recalls that gasoline was the item that accounted for half of the inflation in March, due to the return of the collection of federal taxes, which were suspended by the government, in 2022.

“Currently, in the April inflation calculations, this increase in gasoline registered last month is losing steam, prices are now more stable. As gasoline is relevant to society as a whole, stability in its price helps to reduce inflationary pressures, but does not mean that inflation has dropped”, he analyzes.

Medicines

The effect of the readjustment of medicines, around 5.5%, was not as strong in this month of April as the stabilization of the price of gasoline, according to the coordinator of the FGV IBRE Price Indices. “As the month progresses, the weight of medicines in the calculation of inflation for that month increases, but it does not weigh as much as gasoline, which has been favoring the deceleration of inflation”, clarifies Braz.