Food prices fall, inflation slows down and closes out June at 0.24%
The month of June was marked by the first drop in food prices in nine months, which helped official inflation lose momentum for the fourth month in a row, closing June at 0.24 percent.
Brazil’s official inflation—as gauged by consumer price index IPCA—was released Thursday (Jul. 10) by the statistics bureau IBGE.
In June last year, official inflation was 0.21 percent. Since February 2025, when it hit 1.31 percent, the IPCA has lost momentum—March (0.56%), April (0.43%), May (0.26%), and June (0.24%).
Despite the months-long streak of decelerating inflation, the 12-month accumulated rate stood at 5.35 percent, making it the sixth consecutive month above the government’s target ceiling (4.5%). A period of six months above 4.5 percent is considered a target breach. In April, the accumulated rate reached its highest point of the year—5.53 percent.
Of the nine price groups surveyed, only one—food and beverages (0.18%)—showed a drop in prices, representing a weight of 0.04 percentage points in the IPCA.
IPCA Manager Fernando Gonçalves noted that good figures from the current harvest have increased the supply of food, which explains the fall in prices.
Electricity bills
The item that pushed the IPCA up the most was electricity—up 2.96 percent in the month, or 0.12 percentage points. The explanation lies mainly in the red-flag tariffs, which add BRL 4.46 to every 100 kilowatt-hours consumed.
The flag system is a government measure for the end of the rainy season. The forecast for hydroelectric power generation has worsened, which in the coming months may require a greater use of thermoelectric plants, which generate power at a higher cost.
Gonçalves says that “if we took electricity out of the calculation, the IPCA would be 0.13 percent.”
