São Paulo, March 8, 2004 (Agência Brasil - ABr) - The Cost of Living Index (ICV) computed by the Inter-Union Department of Statistics and Socio-Economic Studies (Dieese) registered a 0.18% deflation in São Paulo in February. According to a study released today by the Dieese, prices in the capital of São Paulo were 0.15% - 0.26% cheaper. Last month's ICV was the lowest since last June (-0.26%). February's rate was 1.64% lower than in January, when the ICV registered 1.46%.

The principal declines occurred in Food (-0.59%), Transportation (-0.30%), and Clothing (-0.99%). Housing also dropped (-0.07%), while there were increases in Domestic Appliances (0.24%), Education (0.16%), Personal Items (0.24%), and Miscellaneous (2.19%). The cumulative inflation for the first two months amounted to 1.27%.

According to the coordinator of Dieese's price surveys, Cornélia Nogueira Porto, the result that was announced was surprising. "A considerably lower rate was expected for February, but the deflation came as a surprise," she said. She believes that inflation should hover around zero in March. In Porto's view, inflation for the year should come to 5.5%. "The expectation now revolves around increases in administered prices, beginning in June," she affirmed. (DAS)