Brazil’s ‘rent inflation’ set to fall for second consecutive month

Brazil’s IGP-10 price index, a predictor of the IGP-M — commonly used to adjust rental contracts and private health plans for inflation — fell 0.31 percent in October, for the second month in a row. 

The IGP-M is a broad thermometer of prices, measuring commodities, industry, and inputs for civil construction. The latest dip in the partial IGP-10 index has been put down to falling production costs, especially those of iron ore, reflecting uncertainties on the Chinese market.

The index fell 0.37 percent last month, and the aggregate rate for the last 12 months now stands at 22.53 percent. This means that, if the partial results are reflected in the IGP-M index, rental contracts up for annual inflation adjustment in October will increase by over a fifth — a significant jump, but less than the 37.04 percent seen in May of this year.

While the price of producing raw materials has fallen, this respite has yet to be passed on to the public. The consumer price index rose 1.26 percent this month, largely pushed up by rising electricity bills and fuel prices.

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