Inflation predictor index comes in higher than expected

inflation Energy prices went down in May. Photo: Shutterstock
Energy prices went down in May. Photo: Shutterstock

The IPCA-15 consumer price index, Brazil’s mid-month inflation rate and a reliable predictor of official numbers, rose 0.59 percent in May, according to official data. 

Although the rate was well below April’s result (1.73 percent), it remained the highest increase for the month of May since 2016 and came in above market expectations, which had a median forecast of 0.45 percent. Year-to-date, consumer prices rose by 4.93 percent. 

In the 12-month period to May, the index stood at 12.2 percent, a 19-year high.

All the products and services groups surveyed showed an increase in prices, except housing costs (-3.85 percent), influenced by a 14.09 percent drop in electricity prices, with the end of the water scarcity energy tariff last month.The persistence of high prices has made economists – and even the government – revise upwards their projections for 2022 inflation. Last week, the Economy Ministry revised year-end inflation projections up from 6.55 to 7.9 percent.