Services inflation reaches the highest level in eight years with consumption resumption, says IBGE | Economy

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If, on the one hand, Brazil had, in July, the most intense monthly deflation since 1980, on the other It had been eight years since the country had recorded such high accumulated inflation on services. This is what the data released this Tuesday (9) by the Brazilian Institute of Geography and Statistics (IBGE) suggest, which suggest that there is a significant demand effect pushing up prices in the provision of services.

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While the Broad Consumer Price Index (IPCA), considered the official inflation indicator, had a negative change from June to July (-0.68%, the lowest monthly rate in over 40 years), the index calculated specifically for the main services it rose 0.80%. The rate is lower than the 0.90% recorded in June (see infographic below).

(Correction: The g1 was wrong to report that services inflation was the highest in 12 years. In fact, services inflation accumulated in 12 months is the highest since June 2014, that is, in 8 years. The article was corrected at 6:45 pm.)

But the deceleration was not able to stop the rise of the indicator in the accumulated in 12 months, which reached 8.87% (see infographic below). The rate is the highest recorded by the IBGE since June 2014.

“Demand has been putting a lot of pressure on the price of services, especially those related to tourism. This is clearly related to the resumption of household consumption”, pointed out the manager of the IBGE Price Index Coordination, Pedro Kislanov.

Airfare pulls upward trajectory

The researcher highlighted that since December last year, the IPCA accumulated in 12 months on services has maintained a growth trajectory. The greatest pressure on this escalation of the indicator, according to him, comes from the airline ticketswhich is the individual service with the greatest weight on inflation in the country.

Airfare inflation slowed from 11.32% in June to 8.02% in July. In 12 months, however, it accumulates a high of 77.68%, the highest among the services surveyed by the IBGE.

Transport by application is the service with the second highest rate accumulated in 12 months, at 49.78%. Its monthly variation, however, had the opposite movement to that of airline tickets – after having registered deflation of 2.01% in June, it accelerated to a high of 0.72% last month.

The biggest change in prices between services from June to July was that of car rental, which reached 13.39% after having had deflation of 2.44% in the previous month.

Among the main services surveyed by the IBGE, three had deflation from June to July. The most relevant was in the average price of dispatching services (-2.24%), the second negative change in a row, since in June it had fallen by 1.53%. The other two services with deflation in the month were parking (-0.78%) and vehicle painting (-0.67%).

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