Brazil saw a widespread drop in prices in August, driven by cheaper food and housing items. According to the Brazilian Institute of Geography and Statistics (IBGE, in Portuguese), prices fell by 0.02%, contrary to economists’ expectations of a 0.02% rise.
The IPCA is Brazil’s official price index and over the last 12 months, it has risen by 4.24%, with August marking the first negative month since June 2023. As a result, it remains within the government’s 2024 target of up to a 4.5% increase.
The IBGE says that the price of food and beverages fell by 0.44% last month. Food alone contributed to a 0.09% drop in the overall IPCA, indicating that inflation would have been even lower if not for price increases in other product categories.
Food prices at home dropped even more: 0.73%. This was due to significant decreases in the prices of potatoes (-19.04%), tomatoes (-16.89%), and onions (-16.85%). On the other hand, prices for papaya (17.58%), bananas (11.37%), and ground coffee (3.70%) rose.
Housing items were 0.51% cheaper, influenced by a 2.77% drop in electricity bills in August.
All other segments of products and services that comprise the IPCA saw price increases, though none exceeded 0.75%.
The transportation sector saw no overall change, with a 0.61% rise in fuel prices offset by a 4.93% drop in airline ticket prices.
In July, the IPCA had risen by 0.38%, bringing the 12-month accumulated index to the upper limit of the 2024 target: 4.50%.
