Itaú BBA - IPCA falls 0.38% in May and rises 1.88% year-over-year

Macro Brazil

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IPCA falls 0.38% in May and rises 1.88% year-over-year

junio 10, 2020

IPCA posted a 0.38% deflation in May. Core inflation measures remain subdued.


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

 The consumer price index IPCA posted 0.38% deflation in May. The reading was higher than our forecast (-0.46%) and the median of market expectations (-0.47%). The main surprise in comparison to our estimates was milder-than-expected deflation in auto fuels. 

 Core inflation measures remain low and are slowing down at the margin. Underlying services took the spotlight with 0.08% deflation during the month, pushing the 12-month reading to 2.8% from 3.1%. 

 Upcoming IPCA readings tend to remain benign.  We forecast a 0.27% inflation in June, 0.37% in July and 0.19% in August. We expect the IPCA to rise 1.8% in 2020 and 2.8% in 2021. 
 

Julia Passabom


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



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