IPCA forecasts should have new drops driven by food, says economist

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After fuel and electricity have pulled price indices down in July and August, food should follow the same trend for the rest of the year, expects Inter’s chief economist, Rafaela Vitória. The expert told CNN that this should trigger further downward revisions to market expectations for 2022 inflation.

“We should still see further downward revisions of the IPCA, due to the reduction in food prices”, he says.

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The economist highlights the deceleration in the price of agricultural commodities seen in the IGP-10 result for August, released this Wednesday by the FGV/Ibre.

“The weakening in the value of agricultural commodities should impact food prices, leading to a more benign scenario of inflation until the end of the year”, he says.

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In a report released this Tuesday (16), Inter revised the forecast for the IPCA for 2022 from 7.5% to 6.5%. The change reflects the recent drop in gasoline and diesel prices, following the movement in the international oil market. For 2023, the bank raised the estimate from 4.4% to 4.7%.

Inter also revised its 2022 GDP forecast from 2.1 to 2.3%, keeping the estimate for 2023 at 0.7%. For the second quarter of this year, the institution projects growth of 3% in comparison with the same quarter last year.

See full interview in the video.

Source: CNN Brasil

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