PGI-M varies by 0.21% in January 2023

THE General Price Index – Market (PGI-M) it changed by 0.21% in January, after rising by 0.45% in the previous month. With this result, the index accumulates an increase of 3.79% in 12 months. As of January 2022 the index had changed by 1.82% and had accumulated a 16.91% increase in 12 months.

“Among the component indexes of the PGI-M, the producers’ index continues to register a cooling of inflationary pressures. The price of raw materials decelerated from 2.09% to 1.55% and, among intermediate goods, the rate of which passed from -0.30% to -1.06%, the decline was accentuated due of the performance of fuels and lubricants for production, whose prices fell even more, from -2.26% to -5.05%. In the opposite direction to producers’ inflation is consumer inflation, which rose from 0.44% to 0.61% in December, due to the readjustment of school fees and courses, whose prices increased on average by 4.55%”, says André Braz, Coordinator of Price Indices.

What is the cumulative value of the PGI-M in 12 months?

The index accumulates a maximum of 3.79% in 12 months. As of January 2022 the index had changed by 1.82% and had accumulated a 16.91% increase in 12 months.

month of
12 months
Jan-23 0.21% 3.79%
Dec/22 0.45% 5.45%
November 22nd -0.56% 5.90%
October 22nd -0.97% 6.52%
Sep/22 -0.95% 8.25%
Aug/22 -0.70% 8.59%
Jul/22 0.21% 10.08%
Jun/22 0.59% 10.70%
may/22 0.52% 10.72%
Apr/22 1.41% 14.66%
Tue/22 1.74% 14.77%
February/22 1.83% 16.12%
Jan/22 1.82% 16.91%

% change accumulated in 12 months

Broad Producer Price Index (IPA)

The Broad Producer Price Index (IPA) moved 0.10% in January, after rising 0.47% in December. In a step-by-step analysis, the Final Goods Group rate fell 0.05% in January. In the previous month the group rate was -0.29%. The main contribution to this result came from the food subgroup, whose rate increased from -0.29% to 2.64% in the same period. The Finished Products Index (ex), which excludes the fresh food and consumable fuel subgroups, rose 0.10% in January, after falling 0.09% in the previous month.

The Intermediate Goods rate went from -0.30% in December to -1.06% in January. The main cause of this movement was the fuels and lubricants by production sub-group, whose percentage went from -2.26% to -5.05%. The intermediate goods index (ex), obtained excluding the fuels and lubricants sub-group for production, fell by 0.21% in January, compared to a high of 0.13% in December.

Crude commodities rose 1.55% in January after rising 2.09% in December. The following items contributed to the less intense increase in the group: iron ore (from 16.32% to 9.26%), sugar cane (from 0.28% to -0.60%) and cattle (from 1 .55% to 0.65%). On the other hand, the following items stand out: fresh milk (-4.75% to 0.22%) soybeans in grains (-1.52% to -0.92%) and corn in grains (-0.69% to 0.40 %).

Consumer Price Index (CPI)

The consumer price index (CPI) rose 0.61% in January, after rising 0.44% in December. Five of the eight spending categories that make up the index have experienced an increase in their rates of change. The main contribution came from the Education, Reading and Leisure group (from -0.26% to 2.04%). In this category of expenditure, the trend of formal courses should be noted, the rate of which went from 0.00% in December to 4.55% in January.

The groups Transportation (from 0.31% to 0.60%), Health and personal care (from 0.37% to 0.56%), Communications (from 0.48% to 0.79%) and Miscellaneous expenses (0.08% to 0.26%). In these cost categories, the following items are noted: licensing – IPVA (from 0.00% to 1.06%), hygiene and personal care items (from -0.25% to 0.32%) , combined telephony, internet and Pay TV (from 0.69% to 1.38%) and cigarettes (from -0.72% to -0.17%).

On the other hand, the Food (0.99% to 0.61%), Homes (0.42% to 0.09%) and Clothing (0.67% to 0.25%) groups recorded a decrease in their rates of change. The following items influenced these categories of expenditure: vegetables (from 9.75% to 2.10%), residential electricity tariff (from 1.27% to -0.94%) and clothing (from 1.01% to 0.24%).

National Construction Cost Index (INCC)

The National Construction Cost Index (INCC) changed 0.32% in January, compared to 0.27% in December. The three groups that make up the INCC recorded the following changes from December to January: materials and equipment (from 0.37% to -0.26%), services (from 0.43% to 0.53%) and labor (0.16% to 0.77%).

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Monthly % change

Dissemination calendar 2023:

  • 01/30/2023
  • 02/27/2023
  • 03/30/2023
  • 04/27/2023

The complete calendar for 2023 will soon be published by the Brazilian Institute of Economics (FGV IBRE).

Results of previous years:

What is PGI-M?

THE General Price Index – Market (PGI-M) is published monthly by the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV IBRE). The gauge was conceived in the late 1940s to be a comprehensive measure of price movement, which includes not only different activities but also different stages of the production process. Thus, the PGI is a monthly indicator of the level of economic activity in the country, including its main sectors.

The PGI has three versions with chained collection: the PGI-10 (based on the prices determined on the 11th of the month preceding the 10th of the harvest month), IGP-DI (1 to 30) and the most popular, the General Price Index – Marketor simply IGP-Mwhich collects information on price changes from the 21st of the previous month to the 20th of the collection month.

The PGI-M is widely used in the parametric formula for readjusting public tariffs (energy and telephony), in lease contracts and in service supply contracts.

How to calculate the PGI-M?

The calculation of IGP-M, as well as the other two indicators (IGP-10 and IGP-DI), take into account the variation in the prices of goods and services, as well as the raw materials used in agricultural, industrial and civil construction production. Thus, the result of the PGI-M is the weighted arithmetic mean of producer (IPA), consumer (CPI) and civil construction (INCC) inflation.

  • Broad Producer Price Index (IPA);
  • Consumer Price Index (CPI);
  • National Construction Cost Index (INCC).

The weights of each of the component indices correspond to shares of gross domestic expenditure, calculated on the basis of the National Accounts – resulting in the following distribution:

  • 60% for the IPA;
  • 30% for the CPI;
  • 10% for the INCC;

In this context, the IPA is the indicator that monitors the variation in prices perceived by producers, while the CPI monitors the trend in prices that directly impact the final consumer. Finally, the INCC presents the costs for civil construction, in an analysis that takes into account the variation in the prices of building materials and the cost of skilled labour.

How to use IGP-M?

THE IGP-M is one of the component indices of parametric formulas used by telephone and electricity companiespartially responsible for the tariff adjustments of these segments. The General Price Index – Market is also used as an index service provision contracts from different categories, such as e.g education and health plans. Furthermore, PGI-M has become popular because it is widely used as a reference for the real estate sector, for the remodulation of rental contracts.

Due to its regular history of disclosure since the 1940s, the PGI-M is also mentioned in several public-private procurement of the most varied segments. Some of its components, such as the Broad Producer Price Index (IPA), also serve as a benchmark for price adjustments.

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