The Itaipu bonus and the drop in food and transportation prices led to an official inflation rate of -0.32% in August, the lowest rate since August 2022, when the index reached -0.36%.
In July, the Broad Consumer Price Index (IPCA) was 0.07%. In August 2025, -0.11%. The data was released this Friday (11) by the Brazilian Institute of Geography and Statistics (IBGE).
The negative variation in August brought the index to 4.22% over 12 months - the lowest value since March 2026 (4.14%). In July, the total was 4.44%.
Last Tuesday (8), the Focus Bulletin, a survey by the Central Bank (BC) with financial market agents, projected August inflation at -0.23%. For the end of 2026, the market's expectation is 5%.
The inflation target set by the National Monetary Council (CMN) is 3%, with a tolerance of 1.5 percentage points, either higher or lower, that is, an interval of 1.5% to 4.5%.
Since the beginning of 2025, the target evaluation period refers to the immediately preceding 12 months, and not only the one achieved at the end of the year (December). The target is considered unmet if inflation exceeds the tolerance interval for six consecutive months.
Influences
Out of the nine groups surveyed by IBGE, four experienced deflation in August.
- Food and beverages: -0.34% (-0.07 percentage points);
- Housing: -1.87% (-0.29 percentage points);
- Household goods: 0.64% (0.02 percentage points);
- Clothing: 0.12% (0.00 percentage points);
- Transportation: -0.86% (-0.17 percentage points);
- Health and personal care: 0.23% (0.03 percentage points);
- Personal expenses: 1.30% (0.13 percentage points);
- Education: 0.47% (0.03 percentage points);
- Communication: -0.09% (0.00 p.p.).
The housing group experienced the deepest deflation for the month since the beginning of the Real Plan in 1994.
Itaipu Bonus
The explanation lies in the Itaipu bonus, the discount consumers received on their electricity bill this month, which fell an average of 7.63%.
The bonus consists of the distribution of the positive balance from Itaipu's marketing account, a state hydroelectric power plant, which becomes a credit on energy accounts.
Of the entire August IPCA, the electricity bill was the biggest drag on the indicator, representing the smallest variation for an August month under the Real Plan.
The research analyst, Fernando Gonçalves, explains that since the bonus is restricted to the month of August, the electricity bill will reflect this "reversal" in September. "We don't know the final result, but we know the index tends to rise."
Food
The drop in prices for food and beverages was the third consecutive one. In July, it had retreated by 0.67%; in June, 0.24%. The main declines in the group were:
- English potato: -19.89%;
- Carrot: -11.22%;
- Onion: -11.07%;
- Tomato: -10.94%;
- Chicken egg: -4.15%;
- Ground coffee: -1.86%.
Foods are the largest group in the IPCA, representing 21.5% of the Brazilian monthly consumption basket.
Aircraft and fuels
In the transportation group, the biggest impact for the decrease came from airfares, which fell by 13.17% (impact of -0.11 p.p.). The airplane ticket only lost to the electricity bill in terms of negative weight on inflation.
Fuels also helped contain the IPCA, with a variation of -0.86%. In the month, ethanol (-3.95%), diesel oil (-0.80%), and gasoline (-0.59%) fell. Vehicle gas increased by 2.62%.
App-based transportation declined by 4.57%. In this calculation, the IBGE adds to the variation found in August part of the result from July, which, according to the institute, "was inappropriately not accounted for in that month."
Spread
The diffusion index, which shows how inflation is spread, was 54%, meaning that 54% of the 377 products and services surveyed by the IBGE had price increases. In July, it was 50%.
The IBGE breaks down the IPCA into two groups: the services group, which includes prices most affected by the heating or cooling of the economy—that is, more susceptible to the Selic rate—and the monitored prices group, which are usually controlled by contracts, and fuels.
In August, the services group rose by 0.03%; the monitored group, which includes the electricity bill, fell by 1.26%.
Index
The IPCA (Brazilian Institute of Geography and Statistics) calculates the cost of living for families with incomes between one and 40 minimum wages. In total, prices for 377 items (products and services) are collected.
The values are obtained in ten metropolitan regions — Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Vitória, Rio de Janeiro, São Paulo, Curitiba, Porto Alegre — as well as Brasília and the capitals Goiânia, Campo Grande, Rio Branco, São Luís, and Aracaju.