Brazil's official inflation, measured by the IPCA, recorded deflation of 0.32% in August, representing the lowest result for the month since the Real Plan. The result came in below market expectations, which had projected a smaller decline in prices.
The reduction was driven mainly by the decline in electricity prices, airfares, and food. Electricity experienced a significant drop, contributing substantially to the negative result of the index during the period.
The August result represents a reversal compared to previous months, when the country had been registering price increases. The deflation contributes to keeping the year-to-date accumulated inflation more controlled, also influencing projections for inflation over the twelve-month period.
