Consumer inflation moderates despite a mid-year rebound
The National Consumer Price Index (INPC) measures consumer price changes for lower-income households and is particularly relevant for evaluating changes in household purchasing power and the cost of living. Viewed over 12 months, the index provides a clearer picture of the underlying inflation trend than individual monthly readings.
Recent dynamics
INPC inflation remained above 5% for much of the middle of 2025, reaching 5.32% in April and staying close to that level through September. The annual rate then began to decline more clearly, falling to 4.49% in October, 4.18% in November, and 3.90% in December.
At the start of 2026, the annual rate briefly increased to 4.30% in January before dropping sharply to 3.36% in February. This February reading marked the lowest point in the period shown and represented a substantial disinflation from the levels above 5% observed during much of 2025.
The decline did not continue in a straight line. INPC inflation recovered to 3.77% in March, 4.11% in April, and 4.42% in May. The rebound then lost momentum: the rate eased to 4.33% in June and 4.10% in July. July therefore remained 1.03 percentage points below the 5.13% recorded in July 2025.
Interpretation and economic signal
The main 2026 signal is one of disinflation accompanied by a temporary rebound rather than a renewed persistent acceleration. The sharp fall in February was followed by three consecutive increases through May, but the subsequent readings in June and July moved lower again.
This pattern leaves annual INPC inflation above its February low but materially below the rates seen one year earlier. From February to May, the annual rate increased by about 1.06 percentage points; from May to July, it then declined by roughly 0.32 percentage point. The latest movement therefore suggests that the rebound has so far remained contained.
For lower-income households, the persistence of inflation around 4% still implies continued increases in the cost of living. However, the year-over-year comparison shows less inflation pressure than in the middle of 2025, which is a more favorable direction for the preservation of real purchasing power if the moderation persists.
As with any rolling 12-month measure, base effects can influence the path as older monthly observations leave the calculation. Even with that qualification, the decline from above 5% in mid-2025 to 4.10% in July 2026 indicates a meaningful moderation in the annual inflation rate.
Conclusion
INPC inflation in 2026 has followed a two-stage pattern: a sharp disinflation at the beginning of the year, followed by a partial rebound through May and renewed easing in June and July. The latest reading of 4.10% remains well above the February trough of 3.36%, but below both the May 2026 peak of 4.42% and the 5.13% rate recorded in July 2025.
The current signal is therefore one of moderated consumer inflation rather than renewed acceleration. Whether this improvement becomes more persistent will depend on whether the recent easing continues in the coming readings rather than reversing again.