Value was below market projections (0.24%); cite relief in food and energy and that pressure on services is still a concern
Economists heard by Poder360 considered that the inflation preview shows signs of occasional inflationary relief, but assessed that the scenario still requires prudence in the conduct of monetary policy. The assessments come after the IPCA-15 (Broad Consumer Price Index -15) rose 0.18%, below market projections (0.24%) and the September result (0.48%), accumulating an increase of 4.94% in 12 months.
For Pablo Spyer, advisor at Ancord, the result confirms the moderation expected by the market, but does not authorize excessive optimism. “The composition of prices is still a concern, due to the pressure on services and air tickets. This reinforces the need to maintain prudence in combating inflation”these.
Felipe Queiroz, chief economist at APAS (Associação Paulista de Supermercados) highlighted the importance of food as a factor in inflationary relief.
“Essential items such as rice, milk, eggs and onions have become cheaper, which is encouraging for lower-income families”he said. For him, the framework would already allow the BC to initiate gradual reductions in the basic interest rate: “We have a rate of around 15% and inflation is slowing down. It would now be possible to reduce without losing control”.
In turn, Natalie Victal, chief economist at SulAmérica Investimentos, considered the data “qualitatively positive”, but still insufficient to change the direction of the Central Bank.
“The result supports downward revisions in inflation projections, but does not bring additional confidence in the disinflation process”he declared.
Claudia Moreno, economist at C6 Bank, draws attention to the fact that, in 12 months, the IPCA-15 has accumulated an increase of 4.94%, lower than the 5.32% recorded in September, but still well above the inflation target, which is 3%, with a ceiling of 4.5%.
“In our view, the scenario remains challenging, especially in the underlying services segment, which excludes more volatile items, such as airline tickets. Although it slowed from 6.7% in September to 6.3% in October, inflation in this category remains at a high level.”these.
SERVICES ARE CONCERNED
According to Alexandre Maluf, economist at XP Macro, underlying services inflation advanced 0.24% in October.
“Well below our projection, of 0.61%. Thus, the services metric fell from 4.9% to 4.7%”he said. The main surprise for Maluf was the price of car insurance, which fell 2%, after falling 6% in September.
For Paulo Gala, chief economist at Banco Master, the picture is “good news for Brazil”with emphasis on the deflation of industrial goods and the decline in the diffusion of price increases. “We have falling diffusion, cores at a good level and deflation in industrial goods. We are heading towards a better end of the year for inflation”he stated.
Among the points in common, the experts highlighted that the deceleration movement tends to continue until the end of the year, driven by the drop in agricultural prices and the improvement in the exchange rate, but they argued that the Central Bank’s Monetary Policy Committee maintains caution until disinflation is consolidated.
