São Paulo, June 26, 2003 (Agência Brasil - ABr) - São Paulo may end the month with deflation. This estimate comes from the economist, Heron do Carmo, coordinator of the Consumer Price Index (IPC) survey, compiled by the Economic Research Institute Foundation (Fipe) of the University of São Paulo. He revised the projection for June, initially 0.10%, to around -0.05%.

In the estimate presented today by the economist, the IPC can reach 0.50% in July and 0.90% in August, and then fall back to 0.10% in September. This gradual elevation includes the impact of price readjustments in telephone and electric rates. In the third preliminary estimate for this month, the IPC fell to 0.09%, compared with 0.23% in the previous survey.

The chief factors were the average decline of 0.75% in the Food category and 0.95% in the Transportation category, affected by reductions of 4.15% in gasoline prices and 14.44% in fuel alcohol prices. With regard to the Food sector, the justification is that prices were readjusted after a big increase at the beginning of the year. (DAS)