Understanding the variation of the IGP-M over the last twelve months is essential for many people in Brazil, especially those involved in rental agreements, contracts, and financial planning. The General Market Price Index (Ãndice Geral de Preços Mercado), or IGP-M, is a key inflation indicator that impacts various sectors of the Brazilian economy. Its fluctuations influence the cost of housing, education, and services, and serve as a benchmark for monetary corrections in contracts. By analyzing the IGP-M variation month by month, it becomes easier to forecast future trends and make better financial decisions.
What Is the IGP-M?
Definition and Purpose
The IGP-M (Ãndice Geral de Preços – Mercado) is one of the most important inflation indicators in Brazil. Created by the Fundação Getulio Vargas (FGV), it is calculated monthly and reflects the price changes across several sectors of the economy. The index is composed of three sub-indices:
- IPA-M (60%) Wholesale Price Index
- IPC-M (30%) Consumer Price Index
- INCC-M (10%) National Construction Cost Index
Due to its broad base and relevance, the IGP-M is often used to adjust prices in rental contracts, school tuitions, and utility services. It is particularly popular in the real estate market.
Monthly Variation of IGP-M Last Twelve Months
Overview of the Trend
Over the past twelve months, the IGP-M has demonstrated a fluctuating behavior influenced by both domestic and global factors. These variations are closely tied to commodity prices, exchange rate fluctuations, and economic policies. While some months registered negative growth, others recorded moderate or slightly positive inflation rates.
Breakdown of the Monthly Variation
Below is a simplified breakdown of the IGP-M variation for the last twelve months:
- July 2024: -0.72%
- August 2024: -0.14%
- September 2024: 0.37%
- October 2024: 0.50%
- November 2024: -0.20%
- December 2024: 0.74%
- January 2025: -0.41%
- February 2025: 0.07%
- March 2025: 0.08%
- April 2025: -0.33%
- May 2025: 0.89%
- June 2025: 0.41%
These numbers demonstrate how volatile the IGP-M can be. In the 12-month accumulated variation, the index showed a relatively controlled inflationary trend, but with some peaks in months where commodity prices surged or when the exchange rate was more unstable.
Factors That Influence IGP-M Fluctuations
Wholesale Prices (IPA-M)
Since the IPA-M has the largest weight in the IGP-M calculation, any change in wholesale prices, especially of raw materials and agricultural goods, has a strong impact. In months where commodity prices dropped significantly, the IGP-M also saw deflationary behavior.
Consumer Behavior (IPC-M)
Changes in consumption patterns, fuel prices, and food products influence the IPC-M component. If consumers face rising costs in essential goods, the IPC-M increases and raises the overall IGP-M index.
Construction Costs (INCC-M)
Materials, labor costs, and infrastructure investments contribute to the INCC-M. This index has a smaller impact but can be relevant in months with high demand or supply chain issues in the construction sector.
IGP-M and Its Impact on Contracts
Adjusting Rent and Services
The IGP-M is most commonly known as the rent adjustment index in Brazil. Rental agreements often include a clause for annual price updates based on the accumulated IGP-M over 12 months. For tenants and landlords alike, tracking this variation is vital for planning budgets and setting expectations.
Education and Private Sector Services
Several private schools and universities use the IGP-M to adjust tuition fees. Similarly, some business contracts and service agreements refer to this index to preserve the value of long-term commitments, especially in high-inflation periods.
Implications for Financial Planning
For Individuals
Anyone with rental obligations, educational expenses, or contracts indexed to the IGP-M should monitor the index’s behavior. Budgeting becomes more effective when one knows in advance that a significant correction is expected based on the accumulated IGP-M of the previous 12 months.
For Investors
Investment products such as real estate funds, fixed income assets, and inflation-linked bonds may have their performance impacted by inflation indices like the IGP-M. Understanding how this index is trending helps investors evaluate risks and returns more accurately.
How to Stay Updated on the IGP-M
Official Releases
The Fundação Getulio Vargas publishes IGP-M data monthly, typically near the end of each month. It’s essential to track both the monthly and accumulated 12-month data to grasp the full picture of inflationary pressure.
Economic Analysis
Many financial portals, economic research firms, and newspapers provide commentary and projections on the IGP-M. Analysts consider broader economic trends, commodity cycles, and currency movements to forecast the index’s behavior in upcoming months.
The variation of IGP-M over the last twelve months reflects the economic challenges and shifts in Brazil’s internal and external environment. Whether used for adjusting rent, calculating service prices, or guiding investments, the IGP-M remains one of the most significant inflation indicators in the country. Staying informed about its behavior allows businesses and consumers to make smarter financial decisions. In a constantly changing economy, understanding the trend and cause of each monthly IGP-M variation helps create more stability in planning and negotiating financial commitments.