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Brazil: driven by education, inflation advances to 0.78% in February

Ignacio Teson•Tuesday, February 27, 2024•1 min read

A preview of the official inflation in the country, the National Consumer Price Index, increased by 0.78% in February. However, the result remained below the median of financial institutions. Over 12 months, the price index has risen by 4.49%.

After a 0.31% increase in January, the Brazilian Institute of Geography and Statistics (IBGE) reported on Tuesday. In February 2023, the IPCA-15 had risen by 0.76%. The result for February was below the median of the 29 projections from analysts in consulting firms and financial institutions, which estimated an increase of 0.81%. The range of estimates was from a rise of 0.56% to 0.90%.

The index for the month was mainly pressured by education expenses. Prices in this group rose by 5.07% and accounted for 0.30 percentage points of the 0.78% IPCA-15.

In the 12-month cumulative result, the IPCA-15 stood at 4.49% in February, compared to 4.47% in the figure recorded until January, also over a 12-month period.

Four groups experienced a deceleration in price increases: food and beverages (from 1.53% to 0.97%), housing (from 0.33% to 0.14%), and personal expenses (from 0.56% to 0.46%). Clothing moved into negative territory (from 0.22% to -0.39%).

The so-called Diffusion Index, which measures the proportion of goods and services that experienced price increases during the period, dropped to 60.5%, down from 67.0% in the January preview. Excluding food, one of the groups considered more volatile, the indicator showed a broader scope of price increases, rising from 62.9% to 64.4%, the highest percentage since April 2023 (66.8%).

The average of the five IPCA-15 core indexes monitored by the Central Bank accelerated to 0.56% in February, from 0.33% in January. In the 12-month accumulated IPCA-15, the average of the five cores decreased from 4.20% to 4.08%.

The annual inflation target pursued by the Central Bank is 3% in 2024, 2025, and 2026, always with a tolerance range of 1.5 percentage points up or down.

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ABOUT THE AUTHOR See More
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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