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IPCA Remains at 4.01% in 2019 and 4.00% in 2020, According Central Bank

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Financial market economists kept the forecast for the IPCA — the official price index — in 2019. The Focus Market Report, from Central Bank, released on Monday morning (Apr. 29th) shows that the median for the IPCA this year followed with a high of 4.01%. A month ago, it was at 3.89%. The projection for the index in 2020 continued at 4.00%. Four weeks ago, it was on the same level.

The Focus report also will bring the projection for the IPCA in 2021, which followed at 3.75%. In the case of 2022, the expectation also remained at 3.75%. Four weeks ago, these projections were 3.75% for both cases.

The economists’ projection for inflation is below the center of the 2019 target of 4.25%, with the margin of tolerance being 1.5 percentage points (from 2.75% to 5.75%). By 2020, the target is 4%, with a 1.5 point margin (from 2.50% to 5.50%). In the case of 2021, the target is 3.75%, with a margin of 1.5 points (from 2.25% to 5.25%).

The most recent BC projections, considering the market scenario, point to inflation of 3.90% in 2019, 3.80% in 2020 and 3.90% in 2021. They are included in the Quarterly Inflation Report (RTI) of March. The IBGE reported three weeks ago that the March IPCA rose 0.75%. In 12 months, the accumulated rate is 4.58%.

In the Focus now disclosed, among the institutions that are closest to the effective IPCA result in the medium term, called the Top 5, the median projections for 2019 were 3.90% to 3.96%. By 2020, the Top 5 estimate remained at 4.00%. Four weeks ago, expectations were 4.01% and 4.00%, in that order.

In the case of 2021, the median of the IPCA in the Top 5 remained at 3.75%, equal to that verified a month ago. The projection for 2022 in the Top 5 followed at 3.63%, equal to four weeks earlier.

Last 5 days

The median projection for IPCA 2019 updated based on the last five business days went from 4.00% to 4.04%. There were 34 responses to this projection in the period. A month ago, the calculated percentage was at 3.90%.

In the case of 2020, the projection of the IPCA of the last 5 business days remained at 4.00%. A month ago, I was on the same level. The Focus update was made by 33 institutions.

Other months

Financial market economists kept the forecast for the IPCA rise in April 2018 at 0.55%, according to the Focus Market Report. A month earlier, the projected percentage was at 0.40%.

Since May, the Focus projection has been 0.29% to 0.30% and, since June, has gone from 0.26% to 0.27%. A month ago, the percentages were 0.34% and 0.27%, respectively.

In Focus now released, smoothed inflation for the next 12 months was 3.67% to 3.60% from one week to another – a month ago, it was at 3.89%.

Managed Pricing

The Central Bank report also indicated a change in the projection for administered prices in 2019. The median forecast of the financial market for the indicator this year rose from 5.17% to a 5.20% increase. By 2020, the median slowed down from 4.35% to advance 4.25%. A month ago, the market will project an increase of 5.00% for administered prices in 2019 and an increase of 4.30% in 2020.

The Central Bank’s current projections for administered prices in the market scenario indicate increases of 5.1% in 2019 and 4.7% in 2020. These percentages were updated in the Quarterly Inflation Report since March.

IGP-M

This Monday’s Focus showed that the median of the IGP-M projections for 2019 rose from 5.57% to a rise of 5.58%. A month ago, it was at 5.24%. In the case of 2020, the projected IGP-M continued to show a high of 4.00%, equal to that seen four weeks earlier.

Calculated by the Getulio Vargas Foundation (FGV), the General Price Indices (IGPs) are heavily affected by the performance of the exchange rate and wholesale products, especially agricultural products.