Food, transportation push Brazilian inflation predictor up again in November

In another indication that Brazil’s relentless inflation is not slowing down at the desired pace, the IPCA-15 price index (a mid-month reliable predictor of official inflation) came in at +0.53 percent for November.

It was the second straight month above zero, though the IPCA-15 monthly index has gained steam over four months already. Still, the result came slightly below the median prediction by financial markets (0.54 percent).

Food and beverages (0.54%), health and personal care items (0.91%), and transport (0.64%) were the main inflation drivers of the first half of the month. 

Fuel prices rose again, after going down for five consecutive months. After dropping almost 6 percent in October, gasoline prices jumped 1.67 percent in November, representing the biggest single hit to the index for the month. Ethanol and diesel prices also suffered increases, and only vehicular gas continued to post drops among fuels. 

With one eye on his election campaign, President Jair Bolsonaro sanctioned a law back in June to cap state-levied state taxes on energy and transport. The measure did lower fuel prices, which were the main reason for the three deflationary months seen in Brazil since July. 

However, when the measure began to take effect, experts warned that the positive streak would not last long.

Regarding food, the main villain was consumption at home, with double-digit increases in staples such as tomatoes and onions. Food inflation has been persistently high in the country and has been especially hurting low-income families, who ended up not benefiting much from recent deflation as they rely much more on public transportation. 

And for health, health insurance premiums continued to weigh on Brazilians’ pockets.

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