Pressure mounts in both wholesale and retail sectors, and the IGP-DI index soars to 1,0% in February.

By Camila Moreira

SAO PAULO (Reuters) - The General Price Index - Domestic Availability (IGP-DI) rose 1,0% in February, after increasing 0,11% in the previous month, with a strong increase in price pressure at both the wholesale and retail levels, the Getulio Vargas Foundation (FGV) reported on Monday.

The result was slightly below the Reuters poll expectation of a 1,15% increase, bringing the index up 8,78% over 12 months.

During this period, the Broad Producer Price Index (IPA-DI), which accounts for 60% of the overall indicator, rose by 1,03%, compared to a positive variation of 0,03% in the previous month.

"The main influences on producer prices came from eggs and corn, both impacted in February by the same factor: high demand and low availability. In the case of corn, logistical challenges are added, which has temporarily pressured prices, with the potential to affect other products in the food chain, especially animal proteins," explained Matheus Dias, economist at FGV IBRE.

Within the IPA (Wholesale Price Index), egg prices soared 33,86% in February, after a 2,05% drop in the previous month, while corn prices rose 4,80%, following a 1,66% decline.

The Consumer Price Index (CPI) – which accounts for 30% of the IGP-DI – showed that pressure on consumers increased, accelerating to 1,18% in February, from 0,02% in January.

In this case, the main impact came from the end of the Itaipu bonus on electricity tariffs in February, which accounted for almost 50% of the pressure on consumer prices.

Costs in the Housing group went from a 2,43% drop in January to a 3,80% increase in February, with residential electricity rates rising 17,68% after a 13,58% drop.

The National Construction Cost Index (INCC), in turn, saw a slowdown in its increase to 0,40% in February, from 0,83% previously.

The IGP-DI calculates producer, consumer, and construction prices between the 1st and the last day of the reference month.