Brazil's inflation rate accelerated in August, driven by an increase in power bills following the end of a discount that households received in July. According to the Brazilian Institute of Geography and Statistics (IBGE), consumer prices rose by 0.23% from July and 4.61% from the previous year. Comparatively, in July, prices increased by 0.12% from the previous month and 3.99% from a year earlier.

Impact of Itaipu Power Station

The Itaipu power station, located on the Paraná river between Brazil and Paraguay, generated a significant profit in 2022. As a result, a portion of that money was returned to Brazilian consumers in July through a one-time discount on their electric bills. However, in August, power bills surged again, offsetting the temporary relief experienced the previous month.

Housing Prices & Power Bill Influence

In addition to the effect of the discounted power bills, housing prices, which include electric bills, saw a significant shift. Following a decline of 1.01% in July, housing prices rose by 1.11% in August. The increase in residential power prices by 4.59% in August was also influenced by rate hikes in certain Brazilian cities.

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