2023-08-18 17:43:00
The IGP-10 (General Price Index – 10) is an economic indicator used in Brazil to measure the average change in prices of various products and services between the 11th of the previous month and the 10th of the reference month.
Thus, it is composed of the average of the values of three other indices: the IPA (Broad Producer Price Index), the IPC (Consumer Price Index) and the INCC (National Construction Cost Index). Therefore, it is named as a “general” price index.
Thus, the IGP-10 is an important inflation index, as it measures both wholesale and retail inflation. In addition, it is one of the most important indicators in the country, and is used by companies, investors and the government to make financial decisions.
How is the IGP-10 calculated?
First of all, the monthly value of the IGP-10 is calculated by Fundação Getulio Vargas (FGV) from an average of the “10” versions of the IPA, IPC and INCC indices.
In this sense, the weights attributed to each indicator are:
- IPA-10: 60% in the formation of IGP-10;
- IPC-10: 30% in the formation of IGP-10;
- INCC-10: 10% in the formation of IGP-10.
Therefore, the index only considers prices collected between the 11th of the previous month and the 10th of the reference month. Thus, the FGV publishes the index on a monthly basis, generally after the 10th day of the reference month.
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IPA-10
The IPA registers price variations of agricultural and industrial products in intercompany transactions, that is, in the marketing stages prior to final consumption.
IPC-10
The CPI measures the price variation of a fixed set of goods and services that are part of the usual expenses of families with an income level between 1 and 33 monthly minimum wages.
INCC-10
While the INCC was developed to monitor the evolution of material prices, services and labor for the construction of residences in Brazil.
What is IGP-10 used for?
First, the index allows one to have an inflation rate within the calculated range. In this way, it provides a quick and up-to-date view of short-term price developments.
Thus, it is used for readjustments of public tariffs, rental contracts and health plans and insurance.
In addition, economists and analysts can identify inflationary trends and make predictions about future price behavior.
Finally, companies, families and investors also use the IGP-10 to help with financial planning. As it helps to estimate price cost variation, which is important for defining business strategies, making profit projections and making investment decisions.
The IGP-10 measures inflation for which part of the population?
According to the FGV, the indicator is aimed at the entire population, with no restriction on income level or social class, after all, pricing is independent of these differences.
Accumulated IGP-10 value in 2023
| reference month | Monthly evolution | Accumulated 12 months |
| August/23 | -0,13% | -7,37% |
| July/23 | -1,10% | -7,89% |
| June/23 | -2,20% | -6,31% |
| May/23 | -1,53% | -3,49% |
| April/23 | -0,58% | -1,90% |
| March/23 | 0,05% | 1,12% |
| February/23 | 0,02% | 2,26% |
| January/23 | 0,05% | 4,27% |
| December/22 | 0,36% | 6,08% |
| November/22 | -0,59% | 5,55% |
| October/22 | -1,04% | 7,44% |
| September/22 | -0,90% | 8,24% |
| August/22 | -0,69% | 8,82% |
What are the differences between IGP-10, INCC-M and IGP-M?
The IGP-10 and the IGP-M are essentially the same index, being differentiated only by the calculation period of the price variation. While the IGP-10 calculates the variations between the 11th of the previous month and the 10th of the current month, the IGP-M calculates between the 21st of the previous month and the 20th of the current month. Finally, INCC-M is a component of IGP-M, just as INCC-10 is a component of IGP-10.
Conclusion
In short, the IGP-10 plays a key role in the Brazilian economy by measuring price changes over a short period. After all, its importance goes beyond being just an indicator. Since it is a valuable tool for analyzing economic health, informing financial decisions and shaping monetary policy.
After all, the index offers a window into understanding how prices are evolving, which is crucial for effective economic management in an ever-changing environment.
Source: FGV
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