Brazil inflation up 4.52% in 2020

This is the highest increase since 2016

Published in 12/01/2021 - 12:02 By Cristina Indio do Brasil - Rio de Janeiro

Brazil’s inflation rose by 4.52 percent in 2020. This is the highest increase 2016’s 6.29 percent. The percentage reflects the National Broad Consumer Price Index (IPCA), unveiled today (Jan. 12) by the government’s statistics agency IBGE, in Rio de Janeiro.

 In December, the indicator—released along with the year-to-date value—sped up to 1.35 percent, the sharpest variation since February 2003, when it had been 1.57 percent. It is also the most significant change for December since 2002 (2.10%).

The increase in the closed value for 2020 also indicates that the year’s rate went above the center of the target, set by the National Monetary Council (CMN), which was four percent, but still lies within the tolerance margin of 1.5 percentage points up (5.5%) or down (2.5%). In 2019, the inflation had stood at 4.31 percent.

 One of the biggest impacts for consumers in 2020 was the 14.09 percent increase in food and drinks. According to research manager Pedro Kislanov, the growth, which is the highest since 2020 (19.47%), was led by factors such as the demand for these products and the hike of the dollar the commodity prices in the international market. The increase in food prices was a global movement in 2020, the year marked by the COVID-19 pandemic.

According to IBGE, food and drinks, housing, and household articles combined accounted for nearly 84 percent of 2020’s inflation.

Clothing was the only group showing a negative change (-1.13%), explained by social isolation. “People stayed home longer, which may have decreased the demand for clothes,” he noted.

The inflation in 2020 also showed that the price hike was generalized across all 16 locations surveyed by IBGE.

IPCA

The IPCA gauges the inflation of a number of products and services traded in retail, in the personal consumption of families with an income of one to 40 minimum wages, irrespective of source, living in urban areas in the 16 regions in the National System of Consumer Price Index (SNIPC). As it stands today, the minimum wage is R$1,100, or $200.

The data collected for the calculation of the IPCA derives from commercial establishments and service providers, public service concessionaires and internet, from 1 through 30 in the month in question.

Translation: Fabrício Ferreira -  Edition: Kleber Sampaio / Nira Foster

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