Brazil economy sees 0.68% deflation in July

BRASILIA. KAZINFORM - Brazil’s Broad Consumer Price Index, or IPCA, closed out the month of July with 0.68 percent deflation, the lowest rate since the beginning of this time series, in 1980. In June, inflation climbed 0.67 percent. Year to date, the official inflation stands at 4.77 percent and 10.07 percent in 12 months. The figures were released yesterday (Aug 9) by official statistics institute IBGE, Agencia Brasil reports.

The index was pulled by the decline in the price of electricity and particularly fuel, IBGE Manager Pedro Kislanov noted. Gasoline sank 15.48 percent, ethanol was down 11.38 percent, and compressed natural gas was 5.67 percent cheaper.

«On July 20, Petrobras announced a 20-cent reduction in the average price of fuel sold to distributors. We also had Complementary Law 194/22, sanctioned in late June, which reduced the ICMS (Tax on the Circulation of Goods and Services) on fuel, electricity, and communications,» said Kislanov.

He explained that the fuel reduction resulted in a 4.51 percent drop in transportation and was also reflected in housing, down 1.05 percent, with a 5.78 percent reduction in the electricity bill. These were the only two groups with negative variations in the month.

In addition to the reduction in the ICMS rate on electricity services, the national electricity authority ANEEL approved the so-called Extraordinary Tariff Revisions for ten distributors, reducing tariffs as of July 13.

Photo: agenciabrasil.ebc.com.br