Rio, February 16, 2004 (Agência Brasil - ABr) - Inflation increased 0.76% in January, after a 0.52% rise in December, 2003. The Broad Consumer Price Index (IPCA), calculated by the Brazilian Institute of Geography and Statistics (IBGE) and used by the government to determine its inflation targets, was principally influenced by the pressure of food prices, which rose 0.88%, compared to 0.39% in December. Electricity increased 2.19%, due to rate adjustments in various parts of the country. Prices for new and used automobiles were raised 1.62% by car dealerships. Together, these three items accounted for half of the overall variation in the IPCA.

According to the IBGE, "the increases were occasional and do not characterize a generalized price hike, as occurred last year in the middle of the exchange crisis." The manager of the IBGE's System of Price Indexes, Eulina Nunes, explains that excessive rains damaged specific crops, reducing supplies and raising prices. Rice rose 3.16%, due to the transition between harvests, while the price of tomatoes jumped 25.80%, and Rio de Janeiro ("carioca") beans cost 10.74% more.

Fuel prices also rose in January. The price of alcohol went up 1.89%, as against 1.25% in December, 2003, while gasoline prices rose .49%, compared with 0.34% in December. (DAS)