Itaú BBA - IPCA-15 rises 0.14% in November and 2.67% yoy

Macro Brazil

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IPCA-15 rises 0.14% in November and 2.67% yoy

noviembre 22, 2019

IPCA-15 increases 0.14% in November. Core inflation measures remain subdued


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

• The mid-month consumer price index IPCA-15 rose 0.14% in November, printing slightly below our estimate (0.17%) and the median of market expectations (0.16%). The change in food consumed at home is back to positive territory, as beef prices climbed 3% (impact of 0.08 p.p. on today’s result). 

• Core inflation measures remain at comfortable levels. The core measure for underlying services went up 0.09% (below our estimate), and its year-over-year increase receded to 3.4% (from 3.6% in October). 

• Our forecasts for the headline IPCA are 0.47% in November and 0.43% in December. The next two reports will be pressured by the adjustment in lottery tickets and the price shock in the beef market. On the other hand, core inflation measures should 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. Our full-year estimate for the IPCA is 3.53%, thus below the 4.25% target set for 2019. 
 

Julia P. Araujo
 

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



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