INPC, inflation that corrects salaries, accumulates 4.49% in 12 months

The National Consumer Price Index (INPC) closed the month of October at 0.22%. As a result, the 12-month cumulative figure reaches 4.49%. In September, one-year inflation was at 4.29%.

The data was released this Thursday (12) by the Brazilian Institute of Geography and Statistics (IBGE).

Last month, the food products group rose 1.10%; non-food products fell -0.07%.

Salary adjustment

The INPC directly influences the lives of many Brazilians, as the 12-month rolling accumulation is usually used as a calculation reference for salary adjustments in different categories throughout the year.

The minimum wage, for example, takes November data in its calculation. Unemployment insurance, the INSS ceiling and the benefit for those earning above the minimum wage are readjusted based on the result of the INPC accumulated until December.

INPC x IPCA

IBGE also released the Broad National Consumer Price Index (IPCA), known as official inflation, which closed last month at 0.14% and reached 4.63% in 12 months.

One difference between the two indices is that the INPC calculates inflation for families with incomes of one to five minimum wages. The IPCA, for households with income of up to 40 minimum wages. Currently, the minimum is R$1,621.

In the INPC, prices of 367 products and services (so-called sub-items) are determined, ten less than in the IPCA.

Food weighs more

IBGE gives different weights to the price groups surveyed. In the INPC, for example, food represents around 25% of the index, more than in the IPCA (approximately 21%), as lower-income families spend proportionally more on food. From the opposite perspective, the price of a plane ticket weighs less on the INPC than on the IPCA.

According to the research institute, the INPC's calculation aims to “correct the purchasing power of salaries, through measuring price variations in the consumption basket of the lowest-income salaried population”.

Price collection is carried out in ten metropolitan regions: Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Vitória, Rio de Janeiro, São Paulo, Curitiba and Porto Alegre. Collection is also carried out in Brasília, Goiânia, Campo Grande, Rio Branco, São Luís and Aracaju.