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Brazilian inflation today & IPCA insights: 2024 update

Day trading stocks in Brazil in 2024 image representation with brazilian people walking on the street surrounded by shops representing the brazilean stocks

Inflation is a critical economic indicator, reflecting the health and stability of an economy. In Brazil, the IPCA (Índice Nacional de Preços ao Consumidor Amplo) serves as the primary gauge for inflation, influencing financial decisions from household spending to government policies. 

As we navigate through 2024, understanding the nuances of Brazilian inflation and the IPCA's current status is essential for anyone looking to invest or manage their finances effectively in Brazil. Read on to look into the IPCA, its significance, and how it impacts your wallet.

What is the IPCA today (February 1, 2024)?

The official IPCA reading is released by the Brazilian Institute of Geography and Statistics (IBGE) on a monthly basis. It is a lagging indicator, meaning that it provides insight into the inflation figures for the previous month. 

While the January IPCA data  is expected to be released on 9 February 2024, analysts are expecting the month-on-month reading to  come in at around 0.48%, down from the December figure of 0.56%.

Stay tuned for updates on the IBGE website:  https://www.ibge.gov.br/.

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What was the IPCA for the last 12 Months?

In November 2023, the accumulated IPCA for the past 12 months reached 4.7%, representing a decline compared to the peak of 12.13% recorded in April 2022. Despite this downward trend, inflation remains above the Central Bank of Brazil's (The Banco Central do Brasil or BCB) target of 3.25%.

IPCA vs. Brazilian Inflation: what's the difference?

While the IPCA is the benchmark for measuring inflation in Brazil, it's one of several indicators used to track price changes across different sectors. 

The IPCA specifically measures the price variation of a broad set of products and services for families with monthly incomes of up to 40 minimum wages, providing a comprehensive overview of the inflation experienced by the majority of Brazilians.

It's common to confuse the IPCA with "general" inflation in Brazil. The IPCA focuses on price variations for middle-income families, while general inflation can encompass other segments of the population. It's crucial to be aware of both indices to have a comprehensive understanding of the country's inflation landscape.

Other IBGE inflation indices:

Besides the IPCA, the IBGE publishes other inflation indices:

  • INPC: Measures price variations for lower-income families.
  • IPCA-15: Reflects inflation over 15 specific days of the month.
  • IPA: Tracks price fluctuations of agricultural and livestock products.

By consulting these indices, you can gain a broader perspective on the nation's inflationary scenario.

Summary

Comprehension of inflation, particularly through the IPCA, is vital for safeguarding your purchasing power and making astute financial decisions. By monitoring monthly indices and staying informed about economic trends, you can confidently plan for the future.

FAQs

Where can I find more information about Brazilian inflation and the IPCA?

In addition to the IBGE website (https://www.ibge.gov.br/), other reliable sources include:

What are some specific actions I can take to protect myself from inflation?

Beyond investing in assets like stocks or real estate, here are some additional strategies:

  • Negotiate salary increases to keep pace with inflation.
  • Reduce unnecessary expenses and create a budget to track your spending.
  • Seek out investments with inflation-linked returns, such as Treasury Inflation-Protected Securities (TIPS).
  • Diversify your investment portfolio to mitigate risk.

Is it wise to invest during periods of high inflation?

While inflation can pose challenges, it can also present opportunities. Investing during inflation can help your money grow faster than the rate of inflation, protecting its purchasing power in the long run. However, it's crucial to conduct thorough research, choose appropriate investments based on your risk tolerance, and seek professional advice if needed.

What are some risks associated with investing during inflation?

Some potential risks include:

  • Market volatility: Inflation can lead to increased market fluctuations, making investments riskier.
  • Interest rate hikes: Central banks might raise interest rates to combat inflation, impacting certain investments like bonds.
  • Choosing the wrong investments: Not all investments perform well during inflation. Careful selection is crucial.

How can I get started with investing in Brazil?

A: Several online platforms and brokerage firms cater to Brazilian investors. Consider factors like fees, investment options, and platform ease of use when choosing a platform. It's also advisable to consult with a financial advisor familiar with the Brazilian market.

How can Skilling help me? 

Skilling offers a secure and user-friendly platform for you to invest in various markets and safeguard your wealth. Create your free account and explore the possibilities!

This article is offered for general information and does not constitute investment advice. Please be informed that currently, Skilling is only offering CFDs.

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You are about to visit: https://skilling.com/row/ which is operated by Skilling (Seychelles) Ltd, under the Financial Services Authority Seychelles License No: SD042. Before opening an account, please read the terms & conditions and contact our customer support for any questions.

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