Brazil: Softer CPI reading in June

Research evidence excerpt

Brazil: Softer CPI reading in June

J P M O R G A N Latin America Economic Research

10 July 2026

Brazil

Softer CPI reading in June

• Headline CPI surprised to the downside, led by food but with softer services EM, Economic and Policy Research

and goods as well. Gustavo Ribeiro

• Underlying inflation measures have improved, particularly core services. (55-11)gustavo.ribeiro@jpmorgan.com4950-4059

• While the release is encouraging, some pockets of inflation persistence remain, Vinicius Moreira

particularly in underlying goods inflation. (55-11) 4950-3195

vinicius.moreira@jpmorgan.com

Banco J.P. Morgan S.A.

The June IPCA came in notably below expectations, shifting the near-term

narrative in a more constructive direction – and we anticipate this to continue in

July. This release reinforces our below-consensus projection of CPI at 4.8% at the

end of this year and offers a welcome signal after a period in which inflation

dynamics had appeared increasingly concerning. That said, the CPI numbers

remain incompatible with an early convergence to the BCB's 3% target.

Headline inflation rose 0.16% m/m nsa, 11bps below our forecast and 15bps below

market consensus. Instead of accelerating, the CPI moderated from 4.7%oya to

4.6% last month. More importantly, the downside surprise was broad-based rather

than concentrated in a single volatile component (Table 1). Mean core inflation

printed at 0.21% m/m nsa, also 11bps below our estimate, with all major underlying

categories surprising on the downside. Services CPI rose 0.34% m/m nsa, 9bps

below our forecast, with core services CPI at 0.22%, 5bps below our call. Goods

CPI was similarly benign, rising just 0.11% m/m nsa, 10bps below our forecast.

Core Goods registered 0.22%, substantially below expectations. This release