What is IPCA?
The IPCA (National Broad Consumer Price Index) is the official thermometer of inflation in Brazil. It measures how much prices have risen (or fallen) in a given period. It is calculated by the IBGE every month.
What it measures
The IPCA tracks the prices of a “basket” of products and services that Brazilian families consume:
- Food (rice, beans, meat)
- Housing (rent, energy, water)
- Transportation (gasoline, bus)
- Health (health plan, medicines)
- Education (school tuition)
Why IPCA matters to you
- Your money loses value: if the IPCA is 5% per year, R$ 100 today will be worth R$ 95 in a year
- Investments: returns below the IPCA mean you’re losing money
- Selic: the Central Bank raises or lowers the Selic to control the IPCA
- Adjustments: rents, health plans, and salaries are adjusted by the IPCA
IPCA and investments
For your money to really grow, your investments need to yield above the IPCA. That’s why there are securities like the Tesouro IPCA+, which guarantee real returns (above inflation).
IPCA history
- 2020: 4.52%
- 2021: 10.06%
- 2022: 5.79%
- 2023: 4.62%
- 2024: ~4.5%