Brazil Flash Report - IPCA-15 is 1.17 % in November

IPCA-15 kept high in November, reaching 1.17 % in November (vs 1.2% in October). The index rose to 10.73 % (YoY), the highest since feb-2015. Known as the Inflation preview, IPCA-15 measures the same basket of IPCA, but from day 15 of the previous month to the day 15 of the current month.

Even though the rise in prices were distributed among almost all itens, transport kept pressing the overall inflation, rising 2.89 %. Clothing, kept recovering its prices, as we near the end of the year festivities, shops will try to compensate their overall losses from the pandemic rising prices. The good news came from Food and Beverages, that albeit rising 0.4 % in November, decelerated from the previous months (1.38% and 1.27 % in September and October, respectively).

Undervalued BRL, higher prices for oil crude and increasing fiscal risks will keep pressing the inflation in the short term. We are keeping our inflation estimation for 2021 at 10.1 %. For 2022, we believe inflation will not convert fully to the it's target (3.5 %), and it will end up at 5.3 %.