Food prices decline, official inflation slows to 0.16% in June
Food prices posted their first decline since November 2025 and helped bring Brazil’s official inflation rate to 0.16 percent in June. The monthly result for the Extended National Consumer Price Index (IPCA) was the lowest since October 2025. In May, the index had stood at 0.58 percent.
Over the 12 months through June, the IPCA totaled 4.64 percent - still above the government’s target ceiling of 4.5 percent, but below the 4.72 percent recorded through May. In June 2025, the IPCA stood at 0.24 percent.
The figures were released this Friday (Jul. 10) by Brazil’s statistics bureau IBGE.
In the first half of the year, inflation accumulated 3.36 percent. See the official inflation readings in recent months:
June: 0.16%
May: 0.58%
April: 0.67%
March: 0.88%
February: 0.70%
January: 0.33%
Price pressures
Of the nine groups of products and services surveyed by IBGE, food prices exerted the strongest downward pressure, falling 0.24 percent. Among food items, the biggest contributors to the slowdown in the IPCA were açaí pulp, down 14.41 percent, ground coffee, down 3.72 percent, and soybean oil, down 2.78 percent.
According to survey analyst Fernando Gonçalves, the decline in food prices reflects a trend and indicates greater supply of some products.
The strongest upward pressure came from housing. Within that group, electricity costs rose 1.53 percent, making them the single biggest contributor to inflation in the month. The increase was driven by the continuation of the yellow tariff flag, which adds BRL 1.885 to electricity bills for every 100 kilowatt-hours (kWh) consumed.
Diffusion
The diffusion index, which measures how widespread inflation is, stood at 54 percent, meaning that more than half of the 377 products and services surveyed by IBGE registered price increases. The June reading was the lowest since October 2025, when it stood at 52 percent.
Services and regulated prices
IBGE breaks down the IPCA into two groups: services, whose prices are more influenced by economic heating or cooling - and are therefore more sensitive to interest rates - and regulated prices, which are typically set by contracts and include fuels.
In June, the services group rose 0.34 percent, down from 0.40 percent in the previous month. Regulated prices increased 0.29 percent, also below the 0.43 percent recorded in May.
Official inflation
The IPCA is the index used by Brazil’s Central Bank to monitor the inflation-targeting policy.
The current target set by the National Monetary Council (CMN) is 3 percent, with a tolerance margin of 1.5 percentage points above or below - that is, a range of 1.5 percent to 4.5 percent.
Since the beginning of 2025, the evaluation period has been based on the immediately preceding 12 months, rather than only the reading recorded at the end of the year in December. The target is considered breached if inflation exceeds the tolerance range for six consecutive months.
The IPCA measures the cost of living for families earning between one and 40 minimum wages. In total, prices are collected for 377 subitems, including products and services.
