Brazil's Inflation Rises in September 2025 Driven by Electricity Price Surges
Brazil's inflation in September 2025 rose mainly due to a sharp increase in electricity prices, impacting housing costs and keeping inflation above the Central Bank's target.
- • Brazil's IPCA inflation rose 0.48% in September, reaching 5.17% over 12 months.
- • Electricity prices surged over 10%, driving housing costs up 2.97%.
- • Food prices declined for the fourth consecutive month, falling 0.26%.
- • INPC inflation rate was 0.52% in September, reflecting impact on lower-income families.
Key details
In September 2025, Brazil's inflation accelerated, with the IPCA—the official inflation index—increasing by 0.48%, the highest monthly rise since March. This pushed the 12-month inflation rate to 5.17%, above the Central Bank's 3.0% target ceiling, indicating continued inflationary pressure in the economy. The primary driver of this increase was a significant 10.31% rise in electricity prices, influenced by the end of Itaipu Bonus discounts and the implementation of the red tariff flag level 2, which added R$7.87 per 100 kWh consumed. The housing sector, impacted by these energy costs, saw the largest monthly price jump of 2.97 since February 2025. Conversely, food prices fell by 0.26% for the fourth consecutive month due to greater supply availability. The Central Bank maintained the Selic interest rate at 15% annually and projects inflation will approach the target midpoint by early 2028.
Parallel data from the INPC, which measures inflation for households earning one to five minimum wages, showed a 0.52% rise in September and a 5.1% increase over 12 months. The INPC highlighted deflation in three product groups: housing, clothing, and personal expenses, with the 10.57% surge in electricity prices being a key contributor to higher housing costs within this index. Differences between the IPCA and INPC stem from their respective population coverage and weighting of food prices, with the INPC assigning greater weight to food items.
This inflation data underscores the influence of rising electricity tariffs on Brazilian households across income levels and points to ongoing challenges for inflation containment in coming months.