The Índice Geral de Preços – Mercado (IGP-M) saw notable growth of 1.06% in February 2025, registering significantly higher than the previous month’s increase of just 0.27%. This surge amplifies the index’s position for the year, which now accumulates at 1.33%, and marks 8.44% growth over the last twelve months, as reported by the Fundação Getulio Vargas (FGV) on February 27.
The February report stands in stark comparison to February 2024, during which the IGP-M recorded a decline of 0.52%, registering a 12-month reduction of 3.76%. The recent rise, noted by economists, reflects both market expectations and genuine economic pressures impacting everyday consumers.
"The increase was influenced by significant hikes in commodity prices, especially for eggs and coffee, with their supply dramatically affected by rising temperatures," said Matheus Dias, an economist at FGV IBRE. He highlighted the upcoming Lent as intensifying demand for eggs, thereby straining already limited supplies.
On the producer side, the Índice de Preços ao Produtor Amplo (IPA-M) experienced substantial growth, climbing by 1.17% compared to just 0.24% the month prior. Further, within the broader inflationary trend, the IPC saw its rate accelerate to 0.91% this month from just 0.14% previously. Meanwhile, the Índice Nacional de Custo da Construção (INCC) moderated to 0.51%, lower than January’s 0.71%.
More granularly, the overall IPC growth denotes varied impacts across eight spending categories. Among these categories, housing costs considerably surged, climbing from -1.65% to 1.49%, underlining sharp increases especially within residential electricity tariffs. Meanwhile, transportation costs rose from 0.44% to 1.46% during the same period.
Conversely, several sectors such as food, clothing, and health care saw their growth rates diminish, notching down to 0.89%, -0.28%, and 0.42%, respectively. This decline signals some relief for consumers, who have been facing increasing prices across numerous businesses and retailers.
The upward trend of inflation as encapsulated by the February IGP-M places additional pressure on the Central Bank to reconsider monetary policies. Pedro Ros, CEO of Referência Capital, remarked, "The current scenario presents the dual challenge of controlling inflation without hampering growth, especially as real interest rates are presently elevated, leaving limited room for maneuvers without adverse economic repercussions."
Fuel prices, heavily influenced by recent adjustments to the Imposto sobre Circulação de Mercadorias e Serviços (ICMS) and the removal of Itaipu bonus discounts on electricity, impacted consumer expenses significantly. Observations from the month indicated gasoline and energy tariffs were notable contributors to strained household budgets.
The marketplace continues to react to these inflationary pressures. For consumers, the rising living costs translate to tangible impacts. Simply put, when you look at the grocery store, what once cost R$ 5 may now see its price balloon to R$ 7, affecting budgets and spending plans.
With this report, market observers anticipate forthcoming adjustments to the Selic rate to be necessary to regulate economic stability moving forward, especially with other economic indicators set to release soon, including unemployment rates and GDP growth figures.
Although the February IGP-M report may appear as just another series of statistics, the real-life ramifications for fiscal policies, investment opportunities, and household budgeting decisions become clear and pressing. Such inflation not only concerns the Central Bank but echoes throughout every layer of the economy, making it imperative for continued observation and response.