Official inflation is at 0.19% in July, lowest rate for the month in 5 years

The national index of wide consumer prices (IPCA), considered the official inflation of the country, was 0.19% in July, according to the Brazilian Institute of Geography and Statistics (IBGE), published on Thursday (8). Despite the acceleration in relation to the previous month (0.01%), this is the lowest rate for July since 2014, when it was 0.01%. With the result, the index accumulates a high of 2.42% in 7 months. In 12 months, it declined to 3.22%, compared to 3.37% registered in June, remaining well below the target of 4.25% defined by the government for the year, which should reinforce the bets of new cuts in the basic interest rate, currently at 6% per year – the lowest value of the historical series. Fall in the prices of clothing and fuels The food and beverage group, which has the highest weight in the composition of the indicator, was practically stable in the passage from June to July. The feeding at home had a decrease of 0.06%, while the diet had a high of 0.15%. Among the products that were cheaper, emphasis on tomato (-11.28%), Carioca beans (-8.86%), vegetables (-4.98%) and English potatoes (-3.68%). According to IBGE, the drop in clothing prices (-0.52%), transport (-0.17%) and health and personal care (-0.20%) Helped hold inflation in the month. "The fall [of prices] in clothing is explained by the promotions on account of the exchanges of collections. The transport was pulled by the drop in fuel prices (-2.79%), mainly gasoline (-2.80%), which had the greatest negative impact on the composition of the index, from-0.12 percentage points, "the research manager said. According to IBGE, gasoline declined 2.80%, on average, in July in the country. Ethanol and diesel prices fell 3.13% and 1.76%, respectively. Low safe demand high prices According to Gonçalves, there is a negative pressure from low demand in relation to services, which has insured the price high. Service inflation was 0.46% in July, compared to 0.34% in June. See June inflation for groups surveyed and the impact of each in the overall index: Food and Beverage: 0.01% (0 percentage point) Housing: 1.20% (0.19 p.p.) Home articles: 0.29% (0.1 p.p.) Clothing:-0.52% (-0.03 p.p.) Transport:-0.17% (-0.03 p.p.) Health and personal care:-0.20% (-0.02 p.p.) Personal expenses: 0.44% (0.05 p.p.) Education: 0.04% (0 p.p.) Communication: 0.57% (0.02 p.p.) Light Bill was the villain of July inflation Among the items that most weighed in the inflation of July, emphasis on electricity. Only this item had an impact of 0.17 percentage point in the overall index. The light bills averaged 4.48% more expensive to the consumer in July, impacted by tariff change, since the yellow flag was charged, which increases the account in R $1.50 every 100 kWh. According to IBGE, if it were not the electric energy , the July IPCA would be very close to stability, since other important groupings, such as food, transport and health and personal care, had stability or fall. In the transport group, the highlights were the high air passages (18.63%) and interstate bus tariffs (5.21%). The discharge of the group "personal expenses" (0.44%) Was pressed by the excursion items (4.43%) and domestic employee (0.24%). The IBGE calculates the official inflation based on the consumption basket of households with income of one to 40 minimum wages, covering ten metropolitan regions, in addition to the municipalities of Aracaju, Brasília, Campo Grande, Goiânia, Rio Branco and São Luís. Perspectives and inflation target This year's central inflation target is 4.25%, and the tolerance range ranges from 2.75% to 5.75%. The goal is fixed by the National Monetary Council (CMN). To achieve this, the Central bank raises or reduces the basic interest rate of the economy (Selic), which was reduced at the last Copom meeting to 6% per year. Financial institutions analysts continue to be projecting inflation below the center of the government's central goal for the year, with a rate of 3.80% in 2019. For 2020, the financial market kept the inflation estimate at 3.90%. Next year, the central inflation target is 4% and will have been officially fulfilled if the IPCA oscillating between 2.5% and 5.5%. The Monetary Policy Committee (COPOM) of the BC indicated, by means of the minutes of the meeting held last week, that the Selic rate may retreat again in the coming months. The financial market believes that the BC will continue to reduce interest in the coming months. The expectation of analysts, heard in research conducted by the institution last week, is that the Selic rate falls to 5.5% per year in September, and to 5.25% per year in December. For August, IBGE advanced that electricity tends to press inflation again, as this month entered the red Flag Level 1, whose rate is R $4 every 100 kWh consumed. On the other hand, the cylinder gas had a reduction of 8.17% in the refineries. However, the research manager has saved that there is still no claim that there will be a high inflation in August. "The food will have a very good crop. So, as they have a very strong weight in the index, it can bring a restraint in the rate, "he weighed Gonçalves. Inflation by capital Regionally, six of the 16 regions surveyed by IBGE recorded deflation in June. The metropolitan Region of Porto Alegre (0.54%) presented the largest variation, followed by Rio de Janeiro (0.30%) and São Paulo (0.28%). The lowest index was in Goiânia (-0.22%) And in Rio Branco (-0.21%). See all regional indexes: Porto Alegre: 0.54% Rio de Janeiro: 0.30% São Paulo: 0.28% Belo Horizonte: 0.23% Brasilia: 0.22% Recife: 0.19% Aracaju: 0.13% Win: 0.04% Curitiba: 0.04% Belém: 0.03% Campo Grande:-0.01% Salvador:-0.14% Fortaleza:-0.15% São Luís:-0.16% Rio Branco:-0.21% Goiânia:-0.22% INPC in July was 0.10% The National Consumer Price Index (INPC), used as a reference for wage adjustments, stood at 0.10% in June, above the rate of 0.01% of June. The accumulated year is at 2.55% and the last twelve months was to 3.16%, against 3.31% in the 12 months immediately preceding.