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Preliminary inflation reaches lowest level for April in 11 years

IBGE

IPCA-15 advanced only 0.21%, lower level for the month since 2006

The cost of living continues to fall for the Brazilian. In April, the official inflation forecast, as measured by the Broad Consumer Price Index (IPCA-15), advanced to 0.21%. The rate is the lowest for the month since 2006, when the indicator marked 0.17%. The data were released on Thursday (20) by the Brazilian Institute of Geography and Statistics (IBGE).

The result also marks the accommodation of the index within the parameters of the Central Bank, which pursues an inflation target of 4.5%, which may vary by 1.5 percentage points upwards or downwards. In the last 12 months, the rate was 4.41%, the lowest variation in this basis of comparison in seven years. 

In the first half of the year, the result for April was 1.22%, well below the 3.32% registered in the same period of last year.

Among the groups that make up the IPCA-15, the main influencer of the month was food and beverages, which varied 0.31% against the high prices of tomatoes (+ 30.79%) and potatoes (+11 , 63%). The impact of this item in April was only 0.08 percentage point.

In April, however, the most intense falls were registered in the transport groups (-0.44%) and residential articles (-0.43%). In the first, the result was a drop in fuel prices (-2.77%) and, in the second, a decline in furniture prices (-0.71%).

Lower cost of living

 With the economic reforms and the improvement of the confidence indicators, the cost of living of the Brazilian has been falling systematically in recent months. In the first quarter, for example, official inflation reached its lowest level since the beginning of the Real Plan in 1994.

With this, the expectation in the financial market is that inflation ends the year at 4.06%, well below the target pursued by the Central Bank. Given this, the estimate is that the structural interest rates of the economy also fall and remain at 8.50% per year in 2017.

Source: Portal Brasil, with information from IBGE and Central Bank