IBGE: Industry inflation rises in 2026 and reaches 4th highest historical level

The IPP (Producer Price Index), industrial inflation that includes prices in the extractive and processing industries, accumulated an increase of 4.80% in the year and an increase of 1.99% in 12 months.

According to IBGE (Brazilian Institute of Geography and Statistics), the value of the accumulated rate is the fourth highest ever recorded for the month of May since the beginning of the historical series, in 2014.

According to the data, there was a drop of 0.30% in May and a review of the April rate, which was revised from an increase of 2.63% to an increase of 2.62%.

The IPP measures the evolution of product prices at the "factory door", without taxes and freight, in the extractive industry and 23 sectors of the manufacturing industry.

Considering only the extractive industry, there was a decline of 5.90%, after an increase of 4.86% in April.

The manufacturing industry recorded a negative change of -0.01% in May, compared to an increase of 2.50% in April.

Average food prices fell by 2.05% in May compared to April according to the IPP. As a result, after two months with positive variations in the monthly comparison, accumulated in the year, which was 2.37% in April, reached 0.27%.

The annual variation remained negative, changing from -6.96% in April to -7.84% in May. It is the ninth consecutive month of decline.

The food sector is the largest sector in Brazilian industry and, in the case of IPP, its contribution in May was 23.09%.

Four products had the biggest influence on the result from April to May: VHP (very high polarization) sugar, sterilized/UHT/Longa Vida milk, roasted and ground coffee, and crystal sugar.

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According to IBGE, the decline in sugar prices is in line with the advance of the sugar cane harvest and the appreciation of the real against the dollar, of 1% in the monthly comparison; of 8.6%, accumulated in the year.

In relation to coffee, the grain harvest period, added to the appreciation of the real, also explains the drop in price.

In the case of milk, the widespread price reduction behavior among companies was justified "sometimes by a drop in the price of raw milk, sometimes by specific market opportunities".

In May, the IPP registered a drop of 0.30% compared to an increase of 2.62% in April.

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Source: CNN