Brazil’s General Price Index – Internal Availability (IGP-DI) showed deflation for the fourth consecutive month, varying by -0.96% in June. The variation recorded in May was -0.51%. The variation was 1.63% in the same period last year. The accrued rate in 2017 is -2.58%, until June. Year over year, the IGP-DI varied by -1.51%.

The Broad Producer Price Index (IPA) varied by -1.53% in June. The rate was -1.10% in May. The Final Goods index varied by -0.88%. The variation was 0.25% in the previous month. The main reason behind such variation was the processed foods subgroup, which varied from 0.33% to -1.09%. The Final Goods index, resulting from the exclusion of fresh foods and fuel for consumption, varied by -0.53%, compared to 0.24% in the previous month.

The Intermediate Goods group index recorded a change of -0.50%, compared to 0.49% in the previous month. The main reason for this decrease was the fuel and lubricants for production subgroup, which varied from 3.18% to -3.43%. The Intermediate Goods index varied by -0.05% after excluding fuels and lubricants for production. The variation was 0.09% in the previous month.

The Raw Materials stage varied from -4.55% in May to -3.60% in June. The highlights on the upside were iron ore (-19.11% to -6.95%), sugar cane (-4.28% to -2.70%), and coffee (beans) (-3.33% to -1.34%). On the downside there are soy (beans) (5.86% to 0.05%), cattle (-0.13% to -3.01%), and manioc (cassava) (-7.15% to -13.98%).

The Consumer Price Index (CPI) was down -0.32% in June, compared to 0.52% in the previous month. Six of the eight expense categories that comprise the index recorded a lower price variation. The largest contribution for the decline in the CPI came from the Housing group (1.71% to -0.74%). The residential power rate, which fell from 10.88% to -6.56%, should be mentioned in this expense class.

The following groups also showed lower price variation rates: Food (-0.26% to -0.71%), Transport (0.08% to -0.53%), Healthcare and Personal Care (0.75% to 0.52%), Communication (0.28% to -0.10%), and Miscellaneous Expenses (0.48% to 0.31%). In these expense classes, it is worth mentioning the behavior of the following items: vegetables (-2.49% to -7.11%), gasoline (0.01% to -2.86%), medications in general (1.06% to -0.07%), monthly cable TV fee (1.04% to 0.00%), and postal fee (6.32% to 2.07%), respectively.

On the other hand, the Education, Reading, and Recreation (-0.08% to -0.21%) and Clothing (0.70% to 0.86%) groups recorded higher price variation rates. In these expense classes, it is worth mentioning the behavior of the following items: airfare (-9.57% to 13.02%) and footwear (0.10% to 0.72%), respectively.

The core CPI recorded a rate of 0.20%, compared to 0.33% calculated in the previous month. A total of 44 of the 85 items that make up the CPI were excluded from the core calculation. Of this total, 19 showed rates below -0.20%, the lower limit, and 25 recorded variations above 0.56%, the upper limit. In June, the diffusion index, which measures the proportion of items with positive variation rates, was 51.78% – down 3.25 (p.p.) compared to May, when the index was 55.03%.

The June IGP-DI was calculated based on prices collected between the 1^st and the 30^th day of the reference month. The complete results are available on the website, in Portuguese.