Inflation slowed. Food didn't: up 1.04%, keeping rates high
October's IPCA came in at 0.14%, below forecasts. But food at home rose 1.31% and 12-month inflation is still above the ceiling.
To save you time4
- What was the IPCA?
- 0.14% in October (below the expected 0.25%) and 4.63% over 12 months, above the target ceiling for a second month.
- And food?
- Food and beverages rose 1.04%; food at home, 1.31%. Tomatoes +19.6%, onions +11.3%, rice +4.8%, meat +2.3%.
- Why?
- Too much rain, pricier diesel, cold weather, a weaker real and El Niño, per IBGE and economists.
- And rates?
- Analysts see little room for cuts and expect the Selic on hold in December.
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October's IPCA looked good overall and bad on the plate.
The number
Brazil's consumer price index rose 0.14%, below the expected 0.25% and September's 0.82%. Over 12 months, 4.63%: above the target ceiling for a second straight month.
Food
- Food and beverages: +1.04%, the month's biggest contributor.
- Food at home: +1.31%.
- Tomatoes +19.57%, onions +11.29%, rice +4.81%, meat +2.27%.
Energy, gasoline and airfares held the index down. One survey called it the biggest food increase in four years.
Why
IBGE cites heavy rain and pricier diesel. Economists add cold weather, a weaker real and El Niño.
How it reaches you
Rising food prices are the central bank's worst kind of inflation: everyone feels it. That's why the market now treats a Selic hold in December as the base case. For agribusiness it cuts both ways: better prices for food sellers, expensive credit for growers.
