Monetary Correction Calculator

Monetary correction — how it works

Monetary correction (correção monetária) takes a past amount and re-expresses it in today's purchasing power through a price index. The formula reads updated_value = original · (final_index / initial_index). Say you have a R$ 1,000 debt from Jan/2020 and correct it by IPCA through Dec/2023. With the index moving from 5,315.79 to 6,937.27, you get 1,000 · (6,937.27 / 5,315.79) = R$ 1,305.07.

• IPCA (IBGE) — the official inflation gauge for families earning 1 to 40 minimum wages, and the figure the Central Bank targets.
• INPC (IBGE) — limited to families earning 1 to 5 minimum wages, and you'll see it a lot in labour judgments and collective bargaining.
• IGP-M (FGV) — leans heavily on wholesale prices and the USD, and was for years the go-to for rental contracts. When it spiked near 37% in 2021–22, Law 14,401/2022 stepped in to allow renegotiation.
• IGP-DI, INCC, TR — INCC follows construction costs, while the TR (Taxa Referencial) hovers near zero these days and indexes savings accounts plus old FGTS balances.

Brazilian context

When you need an IPCA, INPC or IGP-M restatement, the Central Bank's Calculadora do Cidadão is the reference everyone falls back on. In RE 870,947 the Supreme Court settled on IPCA-E as the correction index for non-tax public debts, meaning judicial condemnations against the State. Away from the public sphere it comes down to whatever the contract says, and there IGP-M and IPCA are the two that dominate rentals, child support, and long-term private obligations.

FAQ

Is monetary correction the same as interest? No. Correction just keeps purchasing power intact by offsetting inflation. Interest is the price of money, charged on top of that correction.

Which index should a rental contract use? Whatever the contract spells out. Historically that was IGP-M, though IPCA has been gaining ground since the 2021–22 spikes. Law 14,401/2022 opened the door to renegotiation in cases where IGP-M ran too far above IPCA.

Can the index be negative? It can. IGP-M turned negative across several months in 2023. When that happens the corrected amount drops below the original, and courts will usually hold it at the original nominal value unless the contract states otherwise.