Consumers ' expectation for annual inflation drops to 5.1% in August, FGV points out

The expectation of Brazilian consumers for inflation in the following 12 months declined 0.2 percentage point, from 5.3% in July to 5.1% in August, according to a monthly survey published on Wednesday (21) by FGV. "The favorable trajectory of inflation observed in recent months has continued to positively influence the expectation of consumers in all income ranges. However, the rise in the price of electricity in July and August and the decrease in the rate of fall in food prices may have been hindrance to a greater reduction in expectations, especially in the first income range, which was high, " Says Renata de Mello Franco, an economist at FGV IBRE. The national index of broad consumer prices (IPCA), considered the country's official inflation, declined in July to 3.22% in 12 months, compared to 3.37% registered in June, remaining well below the target of 4.25% defined by the government for the year. Financial market analysts lowered the inflation estimate for this year from 3.76% to 3.71%, according to the last Focus newsletter of the Central bank. The share of consumers heard by FGV that project values above the inflation target to 2019 (4.25%) Increased from 37.7% in July to 43.4% in August, the largest in the last six months. Meanwhile, the proportion of consumers projecting values within the upper and lower limits of the inflation target to 2019 (between 2.75% and 5.75%) Ranged 0.2 percentage point (P.P.) to 57.8%. In the analysis by income ranges, the biggest fall in August in expectations for inflation occurred among families with monthly family income above R $9,600.00, whose median rate decreased 0.4 p.p., to 4.1%. Only for income consumers up to R $2,100 there was a high value, from 0.1 p.p., to 6%.