IPCA: Ipea revises inflation forecast in June, from 5.6% to 5.1%

The Institute of Applied Economic Research (Ipea) revised downwards the inflation forecast and projected the Extended National Consumer Price Index (IPCA) from 5.6% in March to 5.1% in June. The National Consumer Price Index (INPC) was revised from 5.5% in March to 4.9% in June. According to Ipea, the most favorable behavior of commodities and exchange rates led to the revision.

“According to the researchers, the 12-month inflation curve will present a path reversal in the second half of this year, bearing in mind that the strong deflations presented in the third quarter of last year should not occur in the current year. However, despite the expected acceleration of inflation, the expectation is that it will occur in a much less intense way than previously projected,” says the institute.

The data show an improvement in the trajectory of the main price indices in the country, accentuating the disinflation process of the Brazilian economy in the last quarter. After starting the year with an accumulated increase in 12 months of 5.8%, inflation measured by the IPCA, intensified its deceleration path and, in May of this year, this rate was already 3.9%.

In June, the expectation is that the rate will retreat even more, given that the IPCA-15 data show that the 0.04% increase pointed out in this month was lower than that observed in the same period of the previous year (0.69 %).

“The main focus of inflationary decompression in recent months has been on market prices, especially food and industrial goods, although part of this deceleration is still linked to the sharp drop in regulated prices, as occurred in the third quarter of last year”, informs Ipea .

For administered prices, there was a decrease from 8.2% to 7.9% in inflation for 2023, reflecting the expectation of less accentuated readjustments for fuels and electricity. Regarding market prices, forecasts indicate a more optimistic behavior of all segments that make up this set of goods and services.

For food at home, in addition to the increase of only 1.2%, accumulated in the first five months of the year, the perspective of a larger grain harvest this year, combined with the low probability of the occurrence of climatic events, should provide a variation of prices less intense, causing the expected inflation for this group to fall from 4.5% to 3.7%