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IPCA rises above expectations with clothing and food, analysts say

The rise of 0.62% in the IPCA in December, which ended the official inflation indicator at 5.79% in the accumulated result for 2022, surprised the projections with a result above expectations by the market (0.46%). The biggest impacts for the data to take off from the projections came from the clothing and food groups, observe the analysts.

“After the milder data in November, the IPCA surprised again with a higher than expected increase in December. In addition to the high variation in the month at 0.62%, above our expectation of 0.45%, diffusion rose again to 69% and the core average accelerated from 0.32% to 0.66% in December”, highlighted Rafaela Vitória, chief economist at Inter.

The 0.62% variation was also above Ativa Investimentos’ expectations of 0.47%. According to Étore Sanchez, personal hygiene items and household items were mainly responsible for the difference.

“The nuclei, under the effect of the industrialists highlighted above, ended up surprising upwards. However, it is worth noting that services were well behaved. At the end of the day, the IPCA accumulated in 2022 an increase of 5.8%, largely responsible for the increase in food at home, with +13.2%”, added the economist.

Claudia Moreno, economist at C6 Bank, also pointed out that the increase over the year was a result of international shocks, in addition to domestic pressures.

“The war in Ukraine, which started in February last year, raised fuel and grain prices and postponed the normalization of global production chains”, he pointed out.

“Due to internal dynamics, the greatest pressure came from the services sector, which includes restaurants and beauty salons, influenced by post-pandemic price markdowns, inflationary inertia and, finally, by a more heated job market”, he added. the economist, noting that tax relief in 2022 year inflation reduced inflation by 3 percentage points.

Finally, the chief economist at Nova Futura Investimentos, Nicolas Borsoi, stated that the IPCA “was not worse only because seasonality works against it, since the end of the year is a time of high inflation, but the opening was very bad, mainly by the acceleration of diffusion and the average of the nuclei”.

Inflation in 2023

Experts differ on the level that the IPCA will end this year. While some projections indicate that the data will be higher than that recorded in 2022, others are betting on a slight cooling of prices.

Rafaela Vitória, from Inter, expects an IPCA variation of 5.2% this year, slightly lower than in 2022. “The slowdown in goods inflation should be the positive highlight in 2023, with lower production costs, mainly observed in the drop in commodity prices,” he said.

Nicolas Borsoi, from Nova Futura Investimentos, informed that he will maintain the projection for 2023 from before the December IPCA data. “We expect an increase of 5.50%, without considering the return of taxes on fuels”.

Finally, economist Claudia Moreno, from C6, believes that inflation should end 2023 with a variation of 5.9%, above that registered last year. “In our view, inflation should remain high in the coming months, as a result of inflationary inertia and a more heated job market”, she explained.

Source: CNN Brasil

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