PGI-DI rises slightly in August and interrupts a sequence of 5 months of losses

The General Domestic Availability-Price Index (PGI-DI) posted a slight increase in August, breaking a streak of five consecutive monthly decreases as producer fuel price advances resume, it reported Wednesday the Getulio Vargas Foundation (FGV).

The PGI-DI rose 0.05% in August, after falling 0.40% in the previous month. The result fell short of expectations in a Reuters poll, which predicted a gain of 0.11%.

With this result, the index reduced its accumulated low in 12 months to 6.91%, against a loss of 7.47% recorded in the year ended in July.

The general producer price index (IPA-DI), which accounts for 60% of the general indicator, increased by 0.10% in August, against a decline of 0.61% in the previous month.

“The readjustment of diesel prices (from 0.00% to 13.29%) and petrol (from -7.46% to 8.36%) has allowed the change in the producer index to accelerate”, André Braz, coordinator of price indices, explained in a note.

On the other hand, the consumer price index (CPI), which accounts for 30% of the PGI-DI, fell by 0.22% last month, after showing a slight increase of 0.07% in July.

“As far as consumption is concerned, the sharpest decline in the food group (from -0.36% to -0.84%) sent the index back into deflation,” Braz said.

The national construction cost index (INCC) rose 0.17% in August, compared with 0.10% the previous month.

Inflation in Brazil has shown signs of cooling in recent months, so much so that in early August the Central Bank started what should be a cycle of cuts in the Selic rate, currently at 13.25%. However, economists expect price increases to regain momentum by the end of the year.

Source: Terra

Rose

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