Brazil: Another meaningful downside surprise in the July CPI preview

Research evidence excerpt

Brazil: Another meaningful downside surprise in the July CPI preview

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

28 July 2026

Brazil

Another meaningful downside surprise in the July CPI

preview

• July IPCA-15 rose just 0.06% m/m, below both our forecast (0.15%), which EM, Economic and Policy Research

was at the bottom of the range of estimates, and the Bloomberg consensus Gustavo Ribeiro

(0.22%) (55-11) 4950-4059

• While in the last twelve months the IPCA-15 is still slightly above 4.5%, this gustavo.ribeiro@jpmorgan.com

marks the second consecutive favorable headline inflation print Vinicius Moreira

(55-11) 4950-3195

vinicius.moreira@jpmorgan.com• The downside surprise was concentrated in headline services, while

underlying inflation measures were somewhat firmer than we expected Mirella Sampaio

• Sequential inflation dynamics continue to improve, but core inflation remains (55-11)mirella.sampaio@jpmorgan.com4950-3289

above levels fully consistent with a comfortable convergence toward the Banco J.P. Morgan S.A.

BCB’s target

The July IPCA-15 came in softer than expected, with headline inflation rising just

0.06% m/m nsa, 9bps below our forecast and 16 bps below market consensus. The

release extends a sequence of favorable headline prints and should reinforce the

perception that near-term inflation dynamics have improved relative to the

beginning of the year (Figure 1). While core inflation softened across different

metrics, relative to our forecast the details of the report were less benign than the

headline figure suggests. The downside surprise was concentrated in a few

headline categories, while the main underlying inflation gauges were generally

firmer than what we anticipated (Table 1).