Core Insights - Brazil's National Consumer Price Index (IPCA) rose by 0.26% month-on-month in July, up from 0.24% in June, indicating a slight increase in inflation pressures [1] - The annual inflation rate for the 12 months ending in July is 5.23%, a decrease of 0.12 percentage points from the previous month's 5.35% [1] Inflation Drivers - The primary driver of inflation in July was residential electricity prices, which have been a consistent factor since May and June [1] - The red flag pricing mechanism for electricity remains in effect, with an additional charge of 4.46 Brazilian Reais for every 100 kWh consumed [1] - Residential electricity prices have increased by 10.18% in the first seven months of the year, the highest increase for this period since 2018, compared to 13.78% in the same period of that year [1] Price Movements - Food and beverage prices decreased by 0.27% in July, while clothing and communication prices fell by 0.54% and 0.09%, respectively [1] - Household food prices saw a month-on-month decline of 0.69%, with significant drops in prices for potatoes (down 20.27%), onions (down 13.26%), and rice (down 2.89%) [1] - Prices for dining out increased by 0.87% [1] Additional Consumer Price Index Data - The National Consumer Price Index (INPC) rose by 0.21% month-on-month in July, with a year-to-date increase of 3.30% and a 12-month cumulative increase of 5.13% [1]