Itaú BBA - IPCA rises 0.10% in October and reaches 2.54% year-over-year

Macro Brazil

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IPCA rises 0.10% in October and reaches 2.54% year-over-year

noviembre 7, 2019

12 month IPCA inflation reaches 2.54% in October


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

 

• The consumer price index IPCA rose 0.10% in October, printing somewhat above our estimate and the median of market expectations (0.06% and 0.07%, respectively). Food and apparel costs were behind the deviation vs. our forecast.

• Core inflation measures are still running at comfortable levels. The core measure for underlying services advanced 0.22%, nearing our call, while its year-over-year increase remained at 3.6%. 

• According to our forecasts, the IPCA will climb 0.44% in November and 0.30% in December. Notwithstanding a higher-than-expected reading, today's report reinforces our understanding that inflation remains on a benign path, with all core measures running at comfortable levels and no signs of acceleration. The output gap and inflation itself – in the form of inertia or anchored expectations — support this scenario. We maintain our full-year estimates for the IPCA at 3.3% in 2019 and 3.7% in 2020. 


 

Julia P. Araujo

 

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



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