Brazil Mid-Month Consumer Price Index (CPI) y/y

The National Broad Consumer Price Index (IPCA) measures the inflation of prices of retail products and services in relation to household consumption, where earnings vary between 1 and 40 minimum wages, regardless of the source of income. The index seeks to cover 90% of families living in urban areas included in the National System of Consumer Indices (SNIPC).

The IPCA-15 difference from the National Broad Consumer Price Index (IPCA) is only in the period of time that the survey encompasses, generally from the 16th of the previous month to the 15th of the reference month. The SNIPC collects the data in 11 urban areas, which are the metropolitan areas of Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Rio de Janeiro, São Paulo, Curitiba, Porto Alegre, the Federal District and Goiânia.

Generally, the IPCA methodology includes the following fields: composition of the general price structure; delimitation of the registration bases of products and places; pricing and method of calculation.

The prices are obtained from the registers of informants and products, according to the specific methods of survey. In order to register the informants, two lines of procedures are used, depending on the nature of the various goods searched:

The main line procedure is a survey of informants through the Purchase Locations Search — PLC.

The second line is made for peculiar subitems, where the methodology of the PLC cannot be used (for example: rental values for housing, domestic servants, condominium, utilities, taxes, etc).

The calculation method is accomplished primarily through the arithmetic average of prices collected at different commercial establishments for each product researched in the current month and the average price is compared with the result of the previous month. Subsequently, the subitems index is calculated by applying a simple geometric mean to aggregate the results of the products belonging to the subitems. Finally, for all higher levels of the aggregate set, the Laspeyres formula is used.

The IPCA-15 Annually is officially released monthly by the IBGE Automatic Recovery System — SIDRA. The growth of this index can be considered positive for the Brazilian real.