High in fuels could lead to 7.5% IPCA from 2022, says economist

The fuel readjustment, announced this Thursday (10) by Petrobras, triggered a wave of revisions to the 2022 IPCA (Extended Consumer Price Index).

The increase in prices was one of the strongest made by the company in many years and will have several impacts on the economy. For economist André Braz, from FGV, the index could reach 7.5% in December.

“My forecast was at 6.2%. I may be sinning by excess or lack. But the indication is that it is due to the lack, because of the indirect impacts that this readjustment will cause along the production chain”, he told CNN.

Braz explains that diesel has a much smaller weight in the IPCA calculation, of only 0.25%, against gasoline, which is 6.58%. He considers that the biggest effect of the price readjustment will not be given by the amount charged at the gas station pump, but by the diffusion of the increase in the economy.

“I’m talking about freight, agricultural machinery, urban buses. In the case of urban transport, we do not know how much the tariff readjustment will be until now. This indirect impact is not trivial and can salt inflation a lot,” he said.

Petrobras announced an increase of 18% for gasoline, 24.9% for diesel and 16% for LPG. Cooking gas has a marginal weight in the IPCA calculation, but it commits 1.4% of the budget of low-income families, which increases the loss of purchasing power and stimulates economic activity.

André Braz considers that we are still in March and there is a lot of uncertainty about what can happen with the war in Ukraine and also in the domestic scenario.

“There is still a lot of water to roll this year. It could even be that oil stabilizes at a lower level, which could lead to a reduction in the price of gasoline. But today it is very difficult to believe in this possibility given what is happening in Ukraine. If it happens, I will have overestimated the IPCA by 7.5%, sinning for the excess”, he ponders.

This year’s inflation target is 3.5%, with an interval of 1.5 points to accommodate shocks.

According to the Focus report on Monday (7), the average expectation of analysts consulted by the BC rose for the eighth consecutive time, to 5.65%. The readjustment announced by Petrobras should promote a new review in the collection at the end of the week.