Brazil’s producer inflation slowed down in November 2021

Amid declining oil prices, Brazil's producer inflation inched down in November 2021, on an annual basis. The local producer price index (PPI) increased by 28.86% y/y in the eleventh month of 2021, following a growth of 28.95% y/y in October. Notably,  producer prices for oil refining and alcohol products remained higher in the country, jumping by 80.1% y/y in November, followed by other chemical products (+60.7% y/y), metallurgy (+48.9% y/y) and wood (+39.8% y/y). 

On a monthly basis, however, the PPI rose by 1.3% m/m in November, after surging by 2.26% m/m in October. Producer prices for oil refining and alcohol products also supported the overall index on the monthly comparison, growing by 6.63% m/m, followed by other chemical products (+4.9% m/m) and beverages (+2.5% m/m). Prices on the extractive industry, however, fell by 5.2% m/m, as prices of iron ores have been on a downward trend since July, and had a small increase in December.

Despite the less intense producer inflation, Brazil’s consumer inflation continued to accelerate in November, as the Broad National Consumer Price Index (IPCA) rose by 10.74% y/y, after rising by 10.67% y/y in October. The indicator remains well above the 5.25% upper limit of the country’s inflation targeting range for 2021. According to the Brazilian Institute of Geography and Statistics (IBGE), which calculates the index, November’s inflation was influenced mainly by fuels, as gasoline prices growth accelerated to 50.8% y/y in November, from 42.7% y/y in October. In addition, electricity prices rose by 31.8% y/y in the eleventh month of the year – following a growth of 30.3% y/y in the previous month – influenced by a drought in the reservoir regions of hydroelectric plants. 

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Brazil's PPI is updated monthly, available from December 2014 to November 2021. The data reached an all-time high of 36.78% y/y in June 2021 and a record low of -1.14% y/y in October 2016.

 Further data and analysis on Brazil’s economy are available on the CEIC Brazil Economy in a Snapshot – Q3 2021 report.