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1.44%: First Quarter Inflation in Brazil. Thanks to Cheaper Food.

Brazil’s Broad Consumer Price Index (IPCA) registered 0.43% in March, very close to February’s 0.41% rate, according to the figures announced this Friday, April 7, by the Brazilian Institute of Geography and Statistics (IBGE).

This result puts the cumulative inflation index for the first quarter of the year at 1.44%, which is still less than the 1.79% tallied in the first quarter of 2005. The IPCA is used by the government to set its inflation targets.

According to the IBGE, the increment in inflation in March was due to fuel prices, which rose 4.97%. Gasoline increased 2.78%, while alcohol was up 12.85%. During the period from January to March, gasoline prices rose 4.60%, while the price of alcohol jumped 27.54%.

Cooking gas also was more expensive in March. The average increase amounted to 1.22%, but in the metropolitan areas of Recife and Salvador, the increase was substantially greater (6.26% and 2.35%, respectively).

Last month consumers also had to pay more for housing (0.58%), in consequence of the 1.84% average hike in water and sewage bills. The increase in this segment attained 13.16% in Brasí­lia and 8.97% in Belo Horizonte.

Food prices, on the other hand, continued on their downward path. The rate in February was -0.28% and -0.24% in March. The biggest decrease (-12.15%) was in the price of chicken, thanks to abundant supplies.

Inflation was highest in Brasí­lia (0.75%) and lowest in Rio de Janeiro (0.18%). In the 12 months ending in March, the IPCA rose 5.32%, less than the 5.51% registered in the previous 12-month interval, which ended in February. In March, 2005, the IPCA increased 0.61%.

The IPCA is based on the expenses of families whose monthly income does not exceed the equivalent of 40 minimum wages.(R$ 12 mil or US$ 5,634)

The data are gathered in the metropolitan areas of Belo Horizonte, Salvador, Recife, Fortaleza, Belém, Rio de Janeiro, São Paulo, Curitiba, and Porto Alegre, as well as Brasí­lia and Goiânia.

Agência Brasil

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