Latin American Economic Perspectives "Brazil April IPCA: Higher core tod..."

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Latin American Economic Perspectives "Brazil April IPCA: Higher core tod..."

Global Research

12 May 2026ab

Latin American Economic Perspectives Economics

AmericasBrazil April IPCA: Higher core today, but oil is

Rodrigo Martinsstill the main determinant going forward

Economist

rodrigo.martins@ubs.com

+55-11-2767 6338

IPCA rose 0.67% MoM in April Alexandre de Azara

The print was in line with consensus (0.68%) and below our call (0.73%). On a 3m Economist

saar basis, inflation accelerated from 2.7% in February to 5.0% in March and 6.3% in alexandre.azara@ubs.com

+55-11-2767 6570

April, largely reflecting the external energy shock. Headline inflation rose 25bp to

4.39% YoY. The BCB’s 5-core average came in at 0.50% MoM (vs. 0.46% UBSe), raising Fabio Ramos

the 3m saar to 5.3% from 4.9%, while the YoY remained at 4.4%. We still expect Economist

headline inflation to peak around mid-year and to end 2026 at 4.2%. Details below. fabio.ramos@ubs.com

+55-11-2767 6525

Lower gasoline but higher core services

The composition was slightly worse than our forecast. The downside deviation was

concentrated in regulated, non-core prices—mainly gasoline (-5bp contribution).

Offsetting that, core services surprised to the upside, led by auto repair (+2bp

contribution).

Since the start of the Hormuz conflict, gasoline is up 6.5% across the March–April

IPCA prints, adding roughly 34bp to headline inflation. Real time price trackers now

suggest pump prices are flattening, potentially turning slightly negative in the near

term. Notably, this move occurred without a hike in the refinery price regulated by

Brazil’s main oil company, pointing to direct pass-through from international prices,

as 10–15% of domestic gasoline consumption is imported.

Looking at the breakdown