Government downplays inflation rate

Economic Policy Secretary Márcio Holland, from the Finance Ministry, downplayed the outcome from the National Broad Consumer Price Index (“IPCA”) for the last 12 months, which has surpassed its upper 6.5 percent limit set by the government for measuring the inflation. The official inflation for June, therefore, stands at 6.52 percent, in its yearly rate. Compared to May, however, when the rate was 0.46 percent, the index has slowed down, at 0.4 percent.

“The inflation has been dropping since March. It’s been three consecutive months on the wane now, with a deflation rate of –0.11 percent in the food and beverage category. In the first six months of 2013, the same categoy was up 6 percent, and, this year, 5 percent, whereas fresh products had floated 30 percent and now stand at 11 percent,” Holland said.

He further pointed out that the inflation target refers to the calendar year, ending in December, and that the varations reported in the index stem from seasonal events, like early vacation time, when personal expenses float more considerably. “There are climatic factors, like the drought, which also affect prices. Durable and semi-durable goods are more stable,” the secretary said. For July, he expects an even lower monthly index, including wholesale, where rates have been falling, “and should fall even further.”

Holland also declares that what is important is that the inflation is being kept under control and likely to meet this year’s target, which stands at 4.5 percent, plur or minus two percentage points.

Translated by Fabrício Ferreira