Itaú BBA - IPCA-15 moves 0.09% in July and year-over-year change recedes to 3.27%

Macro Brazil

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IPCA-15 moves 0.09% in July and year-over-year change recedes to 3.27%

julio 23, 2019

IPCA- 15 July rises 0.09%, below expectations. Core measures on a benign trajectory.


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

 

 The mid-month consumer price index IPCA-15 rose 0.09% in July, printing below our estimate (0.14%) and the median of market expectations (0.13%). Personal care items and auto fuels were behind the deviation from our call. Prices for food consumed at home showed noteworthy stability, while food consumed away from home rose slightly by 0.09%. In this sub-group, meals delivered 0.12% deflation. Rising airfares (+18%) and residential electricity bills (+1.1%, incorporating the tariff flag system in yellow mode in July, after the green mode in the previous month) pressured the monthly result. Together, these two sub-items contributed 0.12 p.p. to the IPCA-15 in July.

 After the release of today's report, we revised slightly our estimate for the headline IPCA in July to 0.20%. We maintain our forecasts for August and September at 0.07% and 0.15%, respectively. We also maintain our full-year estimates at 3.6% for both 2019 and 2020.

Julia P. Araujo


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



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