Pulled by education. The result exceeded that recorded at the beginning of 2024 in January.

Pulled by education costs, Brazil’s official inflation, measured by the National Consumer Price Index (IPCA), stood at 0.83% in February, after registering 0.42% in January. The information was released on Tuesday by the Brazilian Institute of Geography and Statistics (IBGE).

The rate of 0.83% in February exceeded the median of the projections from 38 financial institutions and consulting firms, surveyed by Valor Data, of a 0.78% increase. The result fell within the range of projections, which ranged from 0.57% to 0.88% growth.

The market swiftly responded to the news with the Real depreciating to 4.98 units per dollar.

The rate recorded in February is the lowest for the month since 2020 when it reached 0.25% and was very close to that of 2023 when it was 0.84%. In previous years, IPCA stood at 1.01% in 2022 and 0.86% in 2021.

With the February rate, the accumulated result over the last 12 months was 4.50%, compared to 4.51% until January. For this result, the median of estimates was 4.44%, with projections ranging from 4.23% to 4.55%.

The IPCA result over 12 months was above the center of the inflation target set by the Central Bank (BC) of 3% for 2024 but within the tolerance range of 1.5 percentage points, more or less.

The acceleration of inflation in February was driven by education costs: the price increase of the group rose from 0.33% in January to 4.98% in February. This influence traditionally occurs in February due to school tuition adjustments at the beginning of the school year.

Housing costs increased from January to February (from 0.25% to 0.27%), while transportation (from -0.65% to 0.72%) and communication (from -0.08% to 1.56%) changed direction.

The average of the five cores of the National Consumer Price Index (IPCA) monitored by the Central Bank rose to 0.50% in February, after recording 0.42% a month earlier. For the IPCA accumulated over 12 months, the average of the five cores decreased from 4.25% to 4.01%.