October inflation should stay at 0.5%, according to FGV economist

October should interrupt the series of three consecutive months of deflation in Brazil, according to the expectation of the coordinator of the Consumer Price Index of the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV Ibre), André Braz.

The economist predicts that the change will remain at 0.5%, driven by the price of food.

The Brazilian Institute of Geography and Statistics (IBGE) releases the official inflation result for October at 9 am this Thursday (10).

Braz points out that a good part of the groups surveyed by the IBGE should register a positive variation. Transport, which had been driving deflation between July and September, due to the fall in fuel prices, should have increased by 0.6%.

According to the FGV economist, the effects of the limitation of the Tax on the Circulation of Goods and Services (ICMS) and the reductions by Petrobras have ceased. Gasoline, for example, is in the fourth week of high, according to the latest bulletin from the National Agency for Petroleum, Natural Gas and Biofuels (ANP), with a national average of R$ 4.98.

Food should rise 0.7%, with an advance of 0.76% inside the home and 0.54% outside. Braz points out that growth should come especially from in natura foods, commonly purchased at fairs.

“Usually, the highlights are roots and tubers and some fruits. Tomato should go up something around 15%; potato, something around 25%; onion, something around 9%; lemon should rise around 20%. These are one-off increases dictated by the weather,” he explains.

Braz also forecasts an increase of 0.26% in housing, 0.77% in clothing, in addition to 0.97% in health and personal care. Only the communication segment should register a drop, around 0.65%.

The IPCA registered deflation in July (-0.68%), August (-0.36%) and September (-0.29%). The October IPCA-15, considered the preview of the month, has already shown a reversal of this trend, with a rise of 0.16%.

This week, the Focus bulletin reviewed 2022 inflation, with a slight increase. The expectation was for 5.63%, while in the previous week, it was 5.61%.