Inflation slows to 0.16% in June and is below projections

The result surprised analysts by being well below the median of financial market projections, which was 0.31% for the sixth month of the year, according to the Bloomberg agency. The rate of 0.16% is even lower than the minimum estimate (0.26%).

One of the reasons for the relief, according to IBGE, was the behavior of the food and beverage group, which saw a price drop in June (0.24%) after an increase of more than 1% in May (1.33%).

In 12 months, the IPCA accumulated an increase of 4.64% until June, after reaching 4.72% until May.

With the new result, the index was for the second consecutive month above the 4.5% ceiling of the inflation target pursued by the BC (Central Bank).

The target is considered to be missed when the accumulated IPCA remains outside the tolerance range for six consecutive months, which ranges from 1.5% (floor) to 4.5% (ceiling). The center is 3%.

On average, financial market projections indicate an IPCA of 5.3% for the 12-month period of 2026, according to the most recent Focus bulletin, published by the BC on Monday (6).

The estimate fell compared to the previous week's bulletin (5.33%). It was the first drop after the start of the war in Iran, which began on February 28. The drop occurred after the truce in the country's conflict with the United States.

American forces, however, resumed attacks on points in Iran on Wednesday (8). The situation occurred after President Donald Trump said that the truce established between the rivals on June 17 was over.

The outbreak of war in February had repercussions for Brazilian inflation. Fuel became more expensive with the rise in oil prices due to the conflict.

The IPCA was also pressured by the rise in food prices in the first half of the year. The advance occurred under the impact of the seasonal reduction in the supply of some products and the increase in production costs after the start of the war.

The situation generated concern for the Lula (PT) government, which invested in a package of measures to contain fuel prices in an election year. The president is expected to run for re-election in October.

El Niño is one of the risks for inflation from the second half of the year onwards. The climate phenomenon challenges agribusiness by changing the distribution of rainfall in the territory.

According to analysts, possible difficulties in food production could increase prices for consumers.

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