Itaú BBA - IPCA climbs 1.15% in December and ends the year at 4.31%

Macro Brazil

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IPCA climbs 1.15% in December and ends the year at 4.31%

enero 10, 2020

IPCA rises 1.15% in December and closes 2019 at 4.31%


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

 

 The consumer price index IPCA posted a 1.15% increase in December. The result came in above our forecast (1.07%) and the median of market expectations (1.08%). As a result, the index ended the year at 4.31% (compared to 3.75% in 2018), close to the target center (4.25%). Core inflation measures remain at comfortable levels. The underlying indicator for service inflation ended the year at 3.6%, while the underlying indicator for industrial prices ended the year at 1.9%. 

 The highlight in the month was the 4.69% increase in food consumed at home, driven by the hike in beef prices (+18.6% and impact of 0.49 p.p.).

 We forecast a 0.26% rise in the IPCA in January, 0.26% in February and 0.28% in March. Our forecast for the first quarter of 2020 includes a partial return of the shock in protein prices, in line with the decline in wholesale beef prices. For now, we forecast inflation at 3.5% in 2020. 

 

Julia Passabom


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



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