Official June inflation is negative at 0.08%

The month of June had deflation, that is, there was a decrease in prices compared to May. The official inflation – calculated by the IBGE (Brazilian Institute of Geography and Statistics) – was -0.08%. It is the first time in the year that inflation has been below zero. This is also the lowest result of the Extended National Consumer Price Index (IPCA – the country’s official inflation) for a month of June since 2017, when the index was -0.23%.

The result, released this Tuesday (11) by the IBGE, in Rio de Janeiro, represents the fourth consecutive month in which inflation loses strength. In May, the IPCA was 0.23%. In the year, the index adds up to 2.87% and, in the last 12 months, 3.16%, below the 3.94% observed in the immediately previous 12 months.

In comparison with May, the groups that most helped to put inflation in the negative field were food and beverages (-0.66%) and transport (-0.41%), which contributed with -0.14 and -0.08 percentage point (pp) in the general index, respectively.

Influence factor

According to the IBGE, food and beverages and transport are part of the group with the greatest influence within the household consumption basket. Together, they represent around 42% of the IPCA.

The food and beverages group was mainly influenced by the decline in food prices at home (-1.07%). Contributed to this the falls of soy oil (-8.96%), fruits (-3.38%), long-life milk (-2.68%) and meats (-2.10%). The cost of eating out went up, however, with less force (0.46%) compared to the previous month (0.58%).

“In recent months, prices for grains such as soybeans have fallen. This directly impacted the price of soy oil and indirectly the prices of meat and milk, for example. These commodities they are inputs for animal feed, and a lower price helps to reduce production costs. In the case of milk, there is also a greater offer on the market”, explained André Almeida, research analyst, in the site from IBGE.

In transport, the decline in prices was motivated by a drop in the prices of new cars (-2.76%) and used cars (-0.93%). This behavior has to do with the federal government’s measure to lower the price of new cars.

“The new car sub-item had the greatest individual impact in the month, with -0.09 pp. This reduction in prices is related to the discount program for the purchase of new vehicles, launched on June 6 by the federal government. This may also be related to the fall in the prices of used cars”, explains the IBGE.