Itaú BBA - IPCA-15 posts 0.16% deflation in December and ends 2018 with a 3.86% increase

Macro Brazil

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IPCA-15 posts 0.16% deflation in December and ends 2018 with a 3.86% increase

diciembre 21, 2018

Our preliminary forecast for the headline IPCA in December is a 0.18% increase, ending the year at 3.78%

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

The mid-month consumer price index IPCA-15 posted 0.16% deflation in December, printing somewhat below our estimate and the median of market expectations (both at -0.12%). According to census bureau IBGE, it was the lowest reading for December since the implementation of the Real Plan, in 1994. The index ended 2018 with a 3.86% increase, up from 2.94% in 2017. Transportation (-0.18 p.p.), housing (-0.08 p.p.) and healthcare (-0.07 p.p.) posted negative contributions during the month, due to falls in fuel prices, electricity and personal care items. In the opposite direction, most of the upward contribution came from food and beverages (0.08 p.p.), followed by personal expenses (0.05 p.p.). Our preliminary forecast for the headline IPCA in December is a 0.18% increase, ending the year at 3.78% (up from 2.95% in 2017). 

Elson Teles
Economist

 

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



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