IGP-M falls 0,34% in March due to decline in iron ore prices, says FGV.

Reuters - The General Market Price Index (IGP-M) fell 0,34% in March, after registering a 1,06% increase in the previous month, with a notable decline in wholesale iron ore prices, according to data released by the Getulio Vargas Foundation (FGV) this Friday.

The IGP-M calculates producer, consumer and construction prices between the 21st of the previous month and the 20th of the reference month.

The drop was much more intense than the 0,17% decline expected in a Reuters poll, and with this month's result, the index has accumulated an 8,58% increase over 12 months.

The Broad Producer Price Index (IPA), which accounts for 60% of the overall index and measures the variation in wholesale prices, fell by 0,73% in March, after rising 1,17% in the previous month.

"In the IPA, the main contribution to the fall in the IGP-M came from iron ore, which registered a decline in prices amid concerns about the trade war," explained Matheus Dias, economist at FGV IBRE.

In the month, iron ore costs fell 3,64%, after rising 0,32% in February.

Meanwhile, the Consumer Price Index (CPI), which has a 30% weighting in the overall index, slowed its increase to 0,80% in March, from 0,91% in the previous month.

"The slowdown in the CPI was mainly influenced by the dissipation of the impact of school tuition adjustments, but also by the sharp drop (of 13,71%) in airfare prices," said Dias.

The National Construction Cost Index (INCC) rose 0,38% during the period, compared to a 0,51% increase in February.