Brazil's official inflation rate was 0,24% in June, according to data released this Thursday (10) by IBGE (Brazilian Institute of Geography and Statistics). The biggest driver of the increase was residential electricity, which rose 2,96% in the month, pressured by the activation of the red tariff flag at level 1.
As a result, the IPCA (Broad National Consumer Price Index) accumulates an increase of 2,99% in 2025 and 5,35% in the last 12 months — exceeding the ceiling of the inflation target established by the CMN (National Monetary Council).
The target for this year is 3%, with a tolerance margin of 1,5 percentage points up or down — that is, between 1,5% and 4,5%. At the current 5,35%, inflation has been above this limit for six consecutive months — which, under the new rules in effect since January, officially constitutes a breach of the target.
Electricity: the biggest inflationary pressure of the year
With a 6,93% increase in the first half of the year, residential electricity has been the main individual impact item on the 2025 IPCA, according to Fernando Gonçalves, IBGE index manager.
“This variation (electricity bill) is the highest for the first half of the year since 2018, when it was 8,02% (…) "At the beginning of the year, with the Itaipu bonus, there was a drop in January, a reversal in February, and then a green flag. Last month, the yellow flag came into effect, and now the red flag," he said.
Electricity bill increase in the century is four times greater than inflation
How is the IPCA calculated?
The IPCA has been calculated since 1980 and covers families with a monthly income of 1 to 40 minimum wages, regardless of the source of income.
The index covers ten metropolitan regions of the country, in addition to the cities of Goiânia (GO), Campo Grande (MS), Rio Branco (AC), São Luís (MA), Aracaju (SE) and the Federal District.
To calculate the monthly index, prices collected in the period from May 30 to June 30 (reference) were compared with prices in effect in the period from May 01, 2025 to May 29, 2025 (base).
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