Radar Perene / Articles / article

The anomaly that flipped its sign

Article

The extreme

One and the same price gauge announced, in two separate months, opposite catastrophes — and both times with force enough to trip the same statistical alarm. In the year of euphoria under the 15 percent rate, the IGP-M retreated to the very floor of its own scale: read on its own, the number described entrenched deflation. In numbers: in June 2025 the index came in at −1.67% for the month, an anomaly of z −4.09. The Selic stood at 15.0% a year; the dollar, R$ 5.55. The IPCA barely moved, held to 0.24%.

What rhymes

Less than a year later — ten months, to be exact — the same index switched sign and extreme. In the year the defenses gave way together, the IGP-M for April 2026 climbed to 2.73% for the month and nailed the opposite extreme, z 3.33. The spread between IGP-M and IPCA lit up as well, z 3.03: the pressure ran along the top, at the wholesale level, ahead of the consumer. The IPCA remained well-behaved, at 0.67%. The Selic had eased only slightly, to 14.5% a year, and the dollar sat lower, at R$ 5.03 — cheaper than at the height of the deflation, the opposite of what intuition would ask for.

What did not happen

The naive reading — the economy left deflation and entered inflation — does not hold. The index Brazilians feel in their pockets barely registered the drama: the IPCA went from 0.24% to 0.67%, without ever touching an anomaly. What travelled from one extreme to the other was only the wholesale gauge. The IGP-M did not describe a regime change; it described the amplitude of a thermometer that sits upstream, where the exchange rate and factory prices land before reaching the shelf.

The honest verdict

The anomaly did not change its nature; it changed its sign. The IGP-M can shout deflation and inflation within a short interval because it measures the part of the price system that moves first and hardest — the same reason the IPCA, slower, rarely gets as far as tripping the alarm. Two opposite extremes, the same instrument, less than a year between them. The gauge went to the floor and to the ceiling; the cost of living, in the middle, barely noticed.

Continue the story: Deflation and inflation in neighboring months · Two years of high rates →

The Radar reads these regimes every day. See today's reading →

Read also: Inflation was the anomaly. Months later, so was deflation. · Rates rose to the ceiling. The mood, higher still.

Characters: Statistical anomaly