Itaú BBA - IPCA has 0.21% deflation in November, printing below the lowest of market estimates

Macro Brazil

< Volver

IPCA has 0.21% deflation in November, printing below the lowest of market estimates

diciembre 7, 2018

Our preliminary estimate for the IPCA in December is a 0.17% increase


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

The consumer price index IPCA fell 0.21% in November, printing below our forecast (-0.07%) and the lowest of market estimates (-0.17%, median at -0.09%). According to census bureau IBGE, it was the lowest reading for the month since the implementation of the Real Plan, in 1994. Personal hygiene items were behind the biggest deviation from our call, with a much sharper decline than anticipated (-4.6%, while we estimated -1.0%), probably reflecting discount pricing. Year-to-date, the IPCA is up by 3.59% and the year-over-year change slowed to 4.05% from 4.56% in October. Four groups posted negative changes during the month, with the largest downward contributions coming from transportation (-0.14 p.p.), housing (-0.11 p.p.), and healthcare and personal care (-0.09 p.p.). On the opposite direction, the biggest upward contribution came from food and beverages (0.10 p.p.), followed by personal expenses (0.04 p.p.). Our preliminary estimate for the IPCA in December is a 0.17% increase that would put 2018 inflation at 3.8% (2.9% in 2017).
 

Elson Teles
Economist

 

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



< Volver