Brazil's mid-month inflation index, the IPCA-15, rose 0.70% in September, the national statistics agency IBGE said on Friday (25). For consumers, it means a shopping basket that cost 1,000 reais in mid-August cost about 7 reais more a month later. It is the biggest September reading in five years, since 2021, when it hit 1.14%.
The result beat every forecast from financial market analysts. The median of estimates compiled by Bloomberg was 0.55%, and even the top guess, 0.66%, fell short of the official number, according to Folha de S.Paulo. Estimates compiled by Reuters were around 0.53%, reports the news site g1.
Power bills rise again
Residential electricity prices jumped 7.42% in September, after falling 6.25% in August. On a 150-real monthly bill, that is about 11 reais more. The increase follows the end of the Itaipu bonus, a temporary discount on power bills that had pushed the index into negative territory in August (-0.40%).
Housing, the group that includes electricity, water and gas, had the largest rise among the nine surveyed (2.07%) and the biggest single impact on the index. Food prices rose again (0.40%) after two months of declines. Tomatoes (20.76%), rice (2.39%) and meats (1.30%) got more expensive, while carioca beans (6.33%) and onions (4.41%) fell.
All nine groups surveyed rose over the month. Cigarettes (14%) and air fares (9.82%) also weighed on the index.
What the index is: the IPCA-15 is a preview of the IPCA, Brazil's official inflation index. It tracks prices collected between August 15 and September 15, while the full IPCA covers the whole month. The final September figure is due on October 9.
Close to the target ceiling
Over 12 months, the index accelerated from 4.24% to 4.47%. In practical terms, the same basket of goods now costs about 134 reais more per month for a household spending 3,000 reais. That is close to the 4.5% ceiling of the tolerance band around the Central Bank's 3% inflation target, as Folha noted.
This was the last IPCA-15 release before the first round of Brazil's presidential election on October 4. The cost of living is a central campaign theme: candidate Flávio Bolsonaro uses high prices to attack President Lula, who is seeking a fourth term and points to job and income growth since 2023, according to Folha.