Cheaper Food and Ethanol Brings Deflation to Brazil

Falling prices of ethanol and food are responsible for continued deflation in the city of São Paulo, according to the latest survey by the Fipe (Fundação Instituto de Pesquisas Econômicas -Economic Research Institute Foundation).

For the third week of June, Fipe found negative inflation of 0.44%. In the second week of June Fipe found negative inflation of 0.50%.

According to the coordinator of the survey, Paulo Pichetti, prices of foods of all types were down: fresh, semi-industrialized and industrialized.

As a group, food was down 1.77% in the survey. As for the drop in the price of ethanol, it is directly connected to an increase in supply now that the sugarcane harvest is underway.

However, Pichetti points out that the tendency is for positive inflation to return, as shown by the difference between the second and third weeks of June (the difference was 0.06 percentage points).

But he adds that the increase will be small and everything points to 2006 inflation slightly less than in 2005, when in was 4.5% for the year. Pichetti says there is every reason to believe the government will reach its target of 4% inflation for this year.

Natural Gas Hike

In a note released yesterday, June 27, Petrobras has confirmed that natural gas imported from Bolivia will be 6% more expensive beginning this Saturday, July 1st, at distributors in Brazil. At natural gas production points in Bolivia the price increase will be around 10%.

Petrobras also says that any changes in prices for final consumers will be announced at the beginning of July. Prices of natural gas, explains the note, are set based on a basket of fuel prices on international markets.

ABr

Tags:

You May Also Like

How Ready Are Brazilians and Latin Americans to Deal with the Next Zombie Invasion?

The publication of Theories of International Politics and Zombies by Daniel Drezner, (1) a ...

LETTERS

STOCK MARKET By Brazzil Magazine Send us your E-mail: brazzil@brazzil.com

US dollar falling face the Brazilian real

Dollar in Brazil Falls to Almost 7-Year Low

Foreign investments in Brazilian stocks and bonds keep making Brazil's currency, the real, stronger ...

Brazilian Leather Exports Grow Over 20% Reaching US$ 1.82 Billion

From January to October, Brazilian exports of leather amounted to US$ 1.82 billion, a ...

Lower Interests Expectation Takes Brazil Market to Record High

Brazilian and Latin American shares rose, as investors await the unveiling of Argentina’s acceptance ...

Missionaries Trying to Clothe Naked Amazon Indians Are Bringing Them Disease

A highly vulnerable uncontacted tribe in the Amazon has been contacted by a missionary, ...

Brazil & Co’s Bank of the South Will Have To Undo Neoliberalism’s Work

The launch of the Bank of the South is an ambitious and strategic gambit ...

Brazil Wants Reduction of Fishing Subsidies to Rich Countries

The overexploitation of the fishing sector in the last years has caused a reduction ...

Brazil’s Fish Story: Big Plans to Develop Amazon’s Aquaculture

Brazil's Amazon currently produces approximately 200,000 tons of fishery products – around 20% of ...

27% of Brazil’s Youth Do Nothing. They Neither Work Nor Study.

About a quarter of Brazilians in the 15 to 24 age group neither work nor ...