Brazilian IGPM shows second month of deflation

The General Market Price Index – (IGP-M) recorded deflation of 0.93% in May, after falling 1.10% a month earlier, according to the Getulio Vargas Foundation (FGV). It is the lowest rate for May months since the beginning of the indicator series in 1989. It is also the third lowest variation for all months of the series, with June 2003 and April 2017 being the lowest ones. In May 2016, the indicator, which serves as a reference for the readjustment of contracts such as rent, rose 0.82%.The fall in the fifth month of 2017 was driven by wholesale deflation, especially industrial products, and by the slowdown in consumer price hikes. The decline of 0.93% was higher than the 0.82%, on average, estimated by economists. The range of estimates was for a decline between 0.74% and 0.89%.

In the year, the IGP-M decreased by 1.29%. In 12 months, it rises only 1.57%, compared to analysts’ forecast of 1.69%.

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