Inflation
Inflation is back inside the target, but only since July
The IPCA, the country's official inflation measure, is up 4.22% over 12 months through August 2026. In May it was 4.72%, above the 4.5% ceiling the central bank tolerates.
The Briefing · Written Oct 4, 2026 · Numbers and charts update with each release
IPCA, 12-month change
% per year, last three years
Source: IBGE (SIDRA)
In August prices fell 0.32% on the month, the first monthly decline since August 2025. The 12-month rate compares the new month with the month dropping out, and August 2025 had fallen only 0.11%, so the 12-month figure slipped from 4.44% to 4.22%.
The inflation target is 3%, with a tolerance of 1.5 percentage points either way, which puts the ceiling at 4.5%. The IPCA was above it in May (4.72%) and June (4.64%) and came back under in July. Over the last three months prices have been roughly flat.
What the number means for you
R$100 of a year ago now costs R$104.22
That is the average rise in the consumer basket over 12 months. A year ago the same calculation gave 5.13%, so the pace has eased by almost a full point.
August was a month of falling prices
A monthly drop helps household budgets, but one month is not a trend. What matters for interest rates is whether the coming months stay quiet.
That is the room left under the ceiling
The gap between 4.22% and 4.5%. It is thin: one strong month, like the 0.48% of September 2025, can erase it.
The next test: what would change the answer
What we do not know yet: the August drop came from an unusual month. For inflation to keep falling, the coming months must print below the ones leaving the calculation.
September 2026 above 0.48%. That is the 2025 month leaving the 12-month figure; a bigger number pushes the rate up.
The 12-month IPCA moving back above 4.5%, as in May and June. It would cut the odds of rate cuts.
October 2026 above 0.09%. That was the weak month of 2025; anything higher lifts the 12-month figure.
Questions readers ask
What is the IPCA?
The broad consumer price index, calculated by IBGE. It tracks prices of a basket of goods and services bought by households earning 1 to 40 minimum wages and is the country's official inflation measure.
What is Brazil's inflation target?
3% a year, with a tolerance of 1.5 percentage points either way, so between 1.5% and 4.5%.
Why did 12-month inflation fall if prices were already rising?
The 12-month figure compares the latest month with the same month a year earlier, which drops out. In August 2026 prices fell 0.32%, against a 0.11% fall in August 2025, so the 12-month rate slipped.
How often is the IPCA published?
Once a month, by IBGE, for the previous month. The numbers and charts on this page update with each release.