What is INPC? Understand how this index is calculated

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Inflation is a problem that often affects the pockets of Brazilians, whether they are consumers or entrepreneurs. Therefore, it is important to monitor the different indexes that measure price variations in the market.

With this in mind, in this content, we will show you what the INPC is, and how it is calculated and published, indicating how it affects the economic life of all of us. Interested? Then continue reading.

What is INPC?
The INPC (National Consumer Price Index) is an inflation index calculated indonesia phone number list published monthly by the IBGE (Brazilian Institute of Geography and Statistics). It was created in March 1979 and its implementation aimed to measure the increase in prices for the most consumed products among families earning between 1 and 5 minimum wages.

Based on the number released month by month, a series of services, salaries and benefits can be readjusted according to the pace of price evolution, preventing the loss of purchasing power of the currency from continually losing value, which is what defines the inflationary process.

How is it calculated?
The calculation of the INPC follows certain parameters, so that the number obtained reflects as accurately as possible the evolution of prices within the income range that the index focuses on.

The first important aspect in calculating the INPC is the data collection date. It is always done between the 1st and the 30th or 31st of the reference month, with some exceptions.

In 2021, for example, the collection date always ended around the 28th of each month, according to the information available on the IBGE website . Therefore, the index released, for example, in the first days of September, will reflect what was measured between August 1st and 31st.

During this data collection period, IBGE technicians go out onto the streets and check retail prices in various locations in Brazil. These research points take into account the coverage area of ​​the National Consumer Price Index System (SNIPC), which includes metropolitan regions and some state capitals, comprising a total of 15 research locations.

But what product and service prices do IBGE researchers look for during the data collection period that will make up the INPC?

Remember when we mentioned that this index aims to measure price growth among families earning between 1 and 5 minimum wages? Thus, the basket of products and services that the survey focuses on considers what is most consumed by people in this income bracket.

To this end, the IBGE conducts the Household Budget Survey (POF) from time to time, precisely to understand what Brazilian families are putting in their shopping carts. From this, it is possible to estimate, on average, what the Brazilian population consumes in various categories, such as food and beverages, leisure,

The last major reformulation of the basket of products and services calculated by the INPC was made in January 2020. At that time, items such as public telephone expenses were removed from the survey and the price of telephone, internet and cable TV combos, as well as streaming services, were added to the list.

It is worth noting that, based on the information collected, a weighting is made in the calculations, so that each item analyzed has a different weight in the composition of inflation. The reason for this is easy to understand: families that earn less, the focus of the INPC, spend most of what they earn on basic items, such as food and hygiene and cleaning products.