BRASILIA. Index used to correct property rental contracts, the General Price Index – Market (IGP-M) should close the year with a variation up to five times greater than the index that is generally used as a parameter for salary adjustments. The IGP-M has already accumulated an increase of 13.02% in the 12 months ended in August and the forecast is to hit 15.28% by December, while the National Consumer Price Index (INPC) is expected to be 2.45%.
If these projections are confirmed, a contract of R $ 3 thousand and an anniversary in January 2021 could reach R $ 3,458.40, in case there is no renegotiation between lessor and lessee. Calculated by the Getúlio Vargas Foundation (FGV), the IGP-M also beats the Broad Consumer Price Index (IPCA) by the Brazilian Institute of Geography and Statistics (IBGE). In 12 months, the indicator used to measure the country’s official inflation is 2.44%.
The discrepancy is linked to the methodology for calculating the indices. “The first big difference is that the IGP-M is not a ‘built’ index, but the weighted average of three other indexes,” says economist André Braz, coordinator of the Consumer Price Index at FGV.
The first component of the IGP-M is linked to wholesale prices for producers, weighing 60%. Retail prices for consumers have a weight of 30% and in construction, 10%. The current pressure is precisely on the wholesale – or “inflation of the factory door”, as economists say.
With the pandemic, the prices of various commodities have risen, amid increased demand from other countries. In August alone, soybeans rose 7%. “The global economy pulls up the demand for commodities and, consequently, the entire chain of derivatives”, says Braz. “The exchange rate devaluation (high of the dollar) has also been heavy. It was 30% in the last 12 months and gained more momentum during the pandemic. ”
The IPCA is calculated based on a broad consumer price base. If, on the one hand, the price of rice has become higher, on the other hand, there is a drop in costs in services such as hotels and airline tickets, for example.
The movement of the IGP-M occurs amid the retraction of employment, income and consumption in Brazil, in the wake of the pandemic. “There is no way to pass on this 13% increase to rent. There is no plausible explanation for the rent to have such a high correction for an index that is being raised by factors not linked to the market ”, says the executive director of Rede Lopes, Matheus de Souza Fabricio.
According to him, commercial and residential tenants are currently looking for property owners to renegotiate the values. “The landlord often knows that he cannot increase the lease price now or the tenant leaves. And the economy is not doing so well. It is not such a good time to exercise the contract from the point of view of correction ”, he says.
In negotiations, says Fabricio, corrections have been between 2% and 3% – something closer to the IPCA. These renegotiations, according to him, are occurring mainly between businessmen and owners of commercial points, in a scenario of doubts about the pace of economic recovery after social isolation.
‘We negotiated the contract value a little bit’
Tenant of a property in Aclimação, in São Paulo, advertising agent Christiane Ng managed to negotiate a discount when it came to readjusting her rent. The contract expired last month, when the IGP-M accumulated 13.02% in 12 months. “We negotiate the value a little. She (the rental company) transferred about 10% ”, she says, who started to pay R $ 2,250.
With the arrival of the pandemic, the publicist was fired in March, but got a new job in May. “My type of contract provides for the advance payment (deposit) of three installments,” he said. “When I was arriving in the third month, I got a job and then I paid only for the condominium.” According to Christiane, the owner did not give any discount during the pandemic. / ERIKA MOTODA