Brazil's official inflation rate reached 0.82% in September, the highest reading for the month since 2021, statistics agency IBGE reported on Friday (9). In practical terms, a basket of goods and services that cost 100 reais in August now costs 100.82. The figure came in above the financial market's median forecast of 0.76%, according to a Bloomberg survey cited by Folha de S.Paulo.

The number contrasts with August, when the IPCA posted deflation of 0.32%, its biggest monthly drop since August 2022. The return of inflation has a clear culprit: electricity bills. Residential power prices jumped 7.98% in September after the end of the Itaipu Bonus, a temporary credit from the Itaipu hydroelectric dam that had discounted bills the previous month.

According to IBGE, electricity alone accounted for 0.32 percentage point of the monthly index. Without it, September inflation would have been 0.52%, nearly a third lower. Also weighing on consumers were the yellow tariff flag, a surcharge of 1.885 reais per 100 kWh that signals costlier power generation, and rate adjustments in cities such as Belém, São Luís and Vitória.

Explainer: what the inflation target ceiling means

Over 12 months, the IPCA reached 4.58%, above the 4.5% ceiling of Brazil's inflation target. That means 100 reais of shopping a year ago now costs 104.58. The country's target is 3% per year, with a tolerance band of 1.5 percentage points in either direction, set by the National Monetary Council.

Explainer: under the continuous target system in place since 2025, the central bank is only formally considered to have missed its target when inflation stays outside the tolerance band for six consecutive months. A single month above 4.5% does not yet constitute an official breach, but it raises pressure on the Central Bank, which uses the Selic benchmark interest rate to rein in prices.

Tomatoes, airfares and gasoline also rose

All nine groups tracked by IBGE became more expensive in September. Besides housing (2.31%), transportation rose 0.89%, with airfares up 9.66% and gasoline up 1.21%, while food and beverages climbed 0.83%, rising again after three straight months of decline.

At the supermarket, the shock came from the produce aisle: tomato prices surged 37.76% in a single month, potatoes rose 24.07% and onions 10.14%, according to Folha. Rice became 4.56% more expensive. Year to date, from January to September, accumulated inflation stands at 3.95%.