Fueled by Ethanol and Phone Rates Brazil’s Inflation Goes Up to 6.30%

Mid month thirty days consumer prices index in Brazil accelerated to 0.28% during August compared to 0.11% in July reported the Brazilian Geography and Statistics Institute, IBGE.

The IPCA-15 index as is known in Brazil during the first eight months of 2005 to mid August reached 3.91% and 6.30% in the last twelve months.


The major impact according to the IBGE was telephone rates which increased 3.39% in August as well as alcohol fuel (or green fuel for vehicles) with 4.22% and regular gasoline 1.14%. The index was measured between July 13 and August 11.


Another impact was the recent decision of Congress to raise the Brazilian minimum wage which had a 1.86% incidence in August’s consumer prices.


Actually Congress voted the increase in spite of President Lula da Silva administration’s opposition. The political crisis has seriously weakened the current administration’s leverage in Congress.


At the other end, food and beverage consumer prices surprisingly contracted 0.67% following a 0.4% increase in July. Average electricity bills for residential users also experienced a 0.65% drop in July.


As to unemployment July repeated June’s 9.4% which is considered the lowest in the last three years. The rate is a considerable advance from last year’s July 11.2%.


The average real value take home of salaries in July actually increased 2.5% compared to June and stands at the equivalent of US$ 396. Compared to July 2004 the increase was 1.6%.


Mercopress – www.mercopress.com

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