The preliminary official Brazilian inflation rate slowed down again in May, but remained above the ceiling of the target set by the federal government. Data released this Wednesday (27) by the Brazilian Institute of Geography and Statistics shows that the National Consumer Price Index 15 (IPCA-15) registered an increase of 0,62% in the month.
The result came in below the rate observed in April, when the indicator advanced 0,89%. Even so, the performance was above the projections of the financial market, which expected an increase of 0,57%.
With the new result, the accumulated inflation over 12 months reached 4,64%, also exceeding analysts' estimates, which projected 4,59%.
The index remains above the ceiling of the ongoing inflation target set by the National Monetary Council for 2026, which is set at 3%, with a maximum limit of 4,5%.
Since last year, the target system has operated on a continuous model, in which compliance is monitored month by month based on accumulated inflation over 12 months.
The result reinforces the pressure on the economic scenario and maintains heightened attention on the next steps of the monetary policy conducted by the Central Bank.
Food items are driving inflationary pressure.
The main impact on the IPCA-15 for May came once again from the food and beverage group.
According to IBGE, prices in the sector rose 1,38% during the period, exerting the greatest influence on the overall index.
The increase reinforces the perception that the cost of food continues to be one of the main factors putting pressure on the budgets of Brazilian families.
Next in line are the housing group, with an increase of 1,03%, and health and personal care, which registered an advance of 1,05%.
The numbers show that expenses considered essential continue to account for a large portion of inflation in the country.
Experts point out that food, housing-related services, and healthcare costs tend to have a strong impact on the population's perception of inflation, especially among middle- and low-income families.
Transportation services register a decline.
Among the nine groups surveyed by IBGE, the only one to show a decline in May was the transportation sector.
The group recorded a drop of 0,33%, partially helping to contain an even greater advance in the overall index for the month.
The other segments experienced more moderate variations.
Household goods rose 0,21%, while clothing advanced 0,36%.
Personal expenses increased by 0,50%, education remained practically stable with a variation of 0,01%, and communication registered an increase of 0,36%.
Despite the slowdown compared to the previous month, economists believe that the composition of the index remains a concern because it concentrates increases precisely in sectors most sensitive to daily consumption.
Inflation target remains under pressure.
The IPCA-15 result increases the challenge for the government and the Central Bank to bring inflation back within the target range.
The ceiling set by the National Monetary Council is 4,5%, while the accumulated rate over 12 months reached 4,64%.
The new continuous inflation targeting model adopted by the country requires constant monitoring of annualized inflation, without relying solely on the closing of the annual calendar.
In practice, this means that the Central Bank continuously monitors whether inflation remains within the permitted range over the months.
Price behavior is also closely monitored by the financial market, which assesses the impacts on interest rates, credit, consumption, and economic growth.
With inflation above the target ceiling, pressure is mounting to maintain a more cautious monetary policy.
The market is watching upcoming indicators.
The better-than-expected result reinforced the attention of economic agents to the next indicators of inflation and economic activity.
In recent months, the market had been observing signs of a gradual slowdown in prices, but the persistence of increases in food and essential services maintains a cautious outlook.
Food inflation remains a major concern, especially due to its direct impact on the cost of living for the population.
Analysts also monitor the effects of weather conditions, the behavior of the dollar, and international prices on domestic indices.
The expectation now is how the next official inflation and economic activity data may influence the Central Bank's future decisions regarding the benchmark interest rate.
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