Itaú BBA - IPCA-15 climbed 1.05% in December and ends the year at 3.91

Macro Brazil

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IPCA-15 climbed 1.05% in December and ends the year at 3.91

diciembre 20, 2019

IPCA-15 rises 1.05% in December due to higher beef prices


For the version with all charts and tables, please open the attached pdf file
 

 The mid-month consumer price index IPCA-15 posted a 1.05% increase in December. The result came in above our forecast (0.99%) and the median of market expectations (0.95%). As a result, the index ended the year at 3.91% (compared to 3.85% in 2018). The highlight in the month was the 3.62% increase in food consumed at home, led by beef (+18.7%, above our forecast of +15.5%).

 Core inflation measures remain at comfortable levels. The core measure for underlying services ended the year at 3.4%, while the core measure for underlying industrial prices stood at 1.8%.

 We forecast a 1.07% rise in the IPCA in December and 0.24% in January. The December reading will still be pressured by lottery readjustments and the shock in beef prices. Core inflation measures, on the other hand, will probably remain at comfortable levels with no signs of acceleration. The output gap and inflation itself, in the form of inertia or anchored expectations, support this scenario.
 

Julia Passabom


For the version with all charts and tables, please open the attached pdf file



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