In February 2025, Brazil’s producer price inflation dropped to 0.13% from 1.35% in January. The food sector’s negative variation significantly contributed to this slowdown. Overall annual producer price growth stands at 9.69%, the highest since September 2022.

In February 2025, Brazil experienced a significant decline in producer price inflation, which fell to 0.13%, down from a revised 1.35% in January. This reduction marked the 12th consecutive month of price increases, yet represented the smallest increment recorded during this period. Notably, 14 out of the 24 industrial sectors reported positive price changes compared to the previous month.

The food sector, which has the highest weight in the Producer Price Index (IPP) calculation, played a critical role in this slowdown, exhibiting a negative variation of -0.84%. This decline ended a streak of nine months of rising food prices. IPP analyst Alexandre Brandão emphasized, “This slowdown is mainly driven by the negative price variation in food items. Additionally, the appreciation of the real against the dollar between December and January affected various sectors, including tobacco, timber, food, and metallurgy. Market factors also played a role in explaining the observed price movements.”

On an annual basis, producer prices have increased by 9.69%, marking the highest annual rise since September 2022. The combination of these factors reflects the complex interplay of market dynamics affecting Brazil’s economic landscape.

In conclusion, Brazil’s monthly producer inflation saw a sharp decline in February 2025, primarily influenced by a downturn in the food sector. While this marks the twelfth consecutive month of price increases, the recent figures highlight a significant easing of inflationary pressure. With a 9.69% annual increase in producer prices, it underscores the ongoing economic shifts and the importance of market conditions.

Original Source: www.tradingview.com