Itaú BBA - IPCA falls 0.31% in April and is up by 2.40% year-over-year

Macro Brazil

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IPCA falls 0.31% in April and is up by 2.40% year-over-year

mayo 8, 2020

April's IPCA posted a 0.31% monthly deflation, leading the 12-month reading to 2.4%.


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

 

 The consumer price index IPCA posted 0.31% deflation in April, printing slightly below our forecast (-0.26%) and the median of market expectations (-0.24%). The slide in fuel prices (-9.6%) and the hike in food costs (2.2%) took the spotlight.

 Core inflation measures remain low and are slowing down at the margin. Underlying inflation in industrial goods dropped 0.29% in today’s report, as the year-over-year increase receded to 1.0% from 1.8%. Underlying service inflation also decelerated under this metric, to 3.1% from 3.3%. 

 Upcoming IPCA readings tend to remain negative. According to our forecasts, deflation will reach 0.42% in May and 0.02% in June. We thus anticipate 0.74% deflation in 2Q20.

 

Julia Passabom


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



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