The Índice Nacional de Preços ao Consumidor Amplo (IPCA), Brazil's benchmark consumer price index, rose 0.14% in October, the IBGE (Brazil's national statistics institute) reported on Thursday. That is less than a fifth of September's 0.82% increase. The index is up 4.1% so far this year and 4.63% over 12 months, slightly above the 4.58% recorded through September.
The reading came in below almost every forecast. The 35 analysts surveyed by Bloomberg expected somewhere between 0.18% and 0.50%, with a median of 0.25%. In the Banco Central's (Central Bank) Focus survey, the median of 139 projections was 0.26%. A Reuters poll pointed to 0.25% for the month and 4.73% over 12 months.
For comparison, October 2025 came in at 0.09% and October 2024 at 0.56%.
Electricity explains the slowdown
The deceleration comes mainly from household power bills. Residential electricity fell 1.92% in October after rising 7.98% in September — a jump driven by the end of a temporary discount tied to the Itaipu bonus. October's decline undoes part of that spike and removes from the index the item that had pushed it hardest the month before.
Transport also helped, falling 0.59%. Airfares dropped 9.21%. Among fuels, which as a group fell 0.31%, gasoline was 0.56% cheaper and vehicle gas 0.46%. Diesel rose 1.66% and ethanol 1.02%.
"The October IPCA shows a reduction in the average price of some goods and services that weigh on household budgets," said Fernando Gonçalves, the IBGE's IPCA manager.
Food moved the other way
Food and beverages was the group that rose most, 1.04%, and also the one with the largest impact on the index: 0.22 percentage point, more than the month's total variation. Tomatoes and meats drove the increase.
The combination is awkward for anyone doing the weekly shop: the headline index slowed because of an administered item, the electricity tariff, while what goes on the table got more expensive. Low aggregate inflation can coexist with a sense of rising prices at the supermarket — and that is what October produced.
Above the target ceiling
The inflation target pursued by the Banco Central is 3%, with a tolerance band of 1.5 percentage point in each direction, putting the ceiling at 4.5%. At 4.63% over 12 months, the index remains outside the band. Under the continuous-target regime, a breach is declared when 12-month inflation stays outside the range for six consecutive monthly releases.
The figure lands eight days after the Comitê de Política Monetária (Copom, the Central Bank's rate-setting committee) held the Selic benchmark rate at 13.75% a year, unanimously, at its November 4 meeting — a decision that interrupted a run of five consecutive cuts.
With information from the IBGE, O Tempo, CNN Brasil and O Povo.
