Itaú BBA - IPCA-15 rises 0.09% in October and 2.72% yoy

Macro Brazil

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IPCA-15 rises 0.09% in October and 2.72% yoy

octubre 22, 2019

IPCA-15 rises 0.09% in October. Core measures remain on a benign path


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 October, printing above our estimate (0.00%) and the median of market expectations (0.03%). Weaker-than-expected deflation in food prices and higher costs for personal care items were behind the deviation from our call. 

• Core inflation measures remain at comfortable levels. The core measure for underlying services went up 0.13%, in line with our estimate, and its year-over-year increase was virtually stable at 3.6%. 

• Our forecasts for the headline IPCA are 0.07% in October, 0.44% in November and 0.32% in December. Notwithstanding a higher-than-expected reading, today's report reinforces our view that inflation remains on a benign path, with all core measures running 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. Our full-year estimates for the IPCA remain at 3.3% in 2019 and 3.7% in 2020. 
 

Julia P. Araujo

 

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



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