Brazil Inflation Rate Dips Further to 3.22% in July
The annual inflation rate in Brazil fell to 3.22 percent in July 2019 from 3.37 percent in the previous month and below market expectations of 3.28 percent. It was the lowest inflation rate since May last year, as prices slowed mostly for transport and housing.
8/8/2019 4:53:02 PM
Year-on-year, prices rose at a softer pace for transport (1.72 percent vs 2.39 percent in June), owing to fuels (-2.85 percent vs -1.85 percent); housing (3.50 percent vs 3.84 percent), namely rents (4.57 percent vs 4.73 percent) and electricity (2.04 percent vs 2.87 percent); health (4.47 percent vs 4.76 percent) and household goods (3.28 percent vs 3.47 percent). In contrast, inflation quickened for food & non-alcoholic beverages (4.13 percent vs 3.99 percent); personal expenses (3.56 percent vs 3.43 percent); clothing (0.48 percent vs 0.39 percent) and education (5.05 percent vs 4.93 percent). Also, prices rebounded for communication (0.27 percent vs -0.21 percent).
On a monthly basis, consumer prices went up 0.19 percent, after rising 0.01 percent in the previous month but lower than market consensus of a 0.24 percent increase. Main upward pressure came from housing (1.20 percent vs 0.07 percent), essentially electricity (4.48 percent vs -1.11 percent), due to the change of the tariff flag, which went from green to yellow, indicating that the energy will cost more, as well as the tariff adjustment in São Paulo, with a large weight in the index. Usually, the color of the flag is printed on the electricity bill (red, yellow or green) and indicates the cost of the energy as a function of electricity generation conditions. Other increases were seen mainly for food & non-alcoholic beverages (0.01 percent vs -0.25 percent), mostly fruit (2.51 percent vs -6.14 percent); personal expenses (0.44 percent vs 0.15 percent) and household goods (0.29 percent vs 0.02 percent).