Inflation is on track to close the year at its worst level in Brazil since 2015. The Broad National Consumer Price Index (IPCA) closed up 0.87% in August, and accumulates growth of 9.68% in the last 12 months.
In the numbers released this Thursday, 9 by the Brazilian Institute of Geography and Statistics (IBGE), the group that had the highest price increase was transport, driven by the increase in fuel prices.
In the year, however, groups like the electricity it’s at food also face high.
Individually, the price of these products rose much more than the general inflation accumulated in the same period, from January to August, which was 5.67%.
The champion is the cucumber, which rose 78% between January and August. If only the month of August is counted, all the items that rose the most individually are also in the food and fuel group.
Other products rose less, but also varied to the point of weighing on the consumer’s pocket.
On the technology and entertainment front, the streaming services, for example, accumulate high of 11.52% in the year, the televisions, 13.21%, and the video game consoles, up nearly 14%, all among the 60 biggest highs of the year.
Me and electricity rose 10.61% in 2021 and 21% in the last 12 months to August, including the end of last year. The price should follow the upward trajectory in September, with the drought and new emergency tariffs from the National Electric Energy Agency taking effect.
Below, see the items that rose the most in Brazil in 2021, according to the national IPCA metric, and the ones that rose the most in August.
Biggest highs in 2021, from January to August:
- Cucumber 78,51%
- Zucchini 72,90%
- Bell pepper 58,18%
- Ethanol 40,75%
- Magazine 34,72%
- Gasoline 31,09%
- vehicle gas 30,12%
- Diesel oil 28,02%
- Refined sugar 27,11%
- Corn meal 25,05%
- Cassava (cassava) 24,93%
- Cabbage 23,82%
- cylinder gas 23,79%
Highest increases in the IPCA subgroups in the month of August:
- Tubers, Roots and Vegetables 8,01%
- Vegetables and vegetables 5,17%
- Fruits 3,90%
- birds and eggs 3,66%
- Fuels (vehicles) 2,96%
- Fuels (domestic) 2,42%
Variation in the IPCA general groups in the month of August:
- General index 0,87%
- transport 1,46%
- Food and Drinks 1,39%
- Articles of Residence 0,99%
- Clothing 1,02%
- Housing 0,68%
- Health and Personal Care -0,04%
- Personal expenses 0,64%
- education 0,28%
- Communication 0,23%
What drives prices up?
In general, factors such as the high dollar, high exports, oil prices abroad and the water crisis that affects the price of electricity are among the main fronts that have raised inflation in Brazil since last year.
“The price of gasoline is influenced by adjustments applied at refineries in accordance with Petrobras’ pricing policy. The dollar, prices on the international market and the rise of biofuels are factors that influence costs, which ends up being passed on to the final consumer,” IBGE research analyst André Filipe Guedes Almeida said in a statement on Thursday.
Some inflation is expected around the world due to the economic recovery, which drives demand. But Brazil is experiencing a complex scenario, with galloping inflation despite unemployment still very high, above 14%.
The water crisis that Brazil is going through this winter has made electricity prices take off, one of the main highs of the year, impacting both the cost for consumers and the costs of the entire production chain.
With rising inflation, further increases in the interest rate are taken for granted. The Selic rate is at 5.25% at the moment, but the projection is that it will close the year at 8%.
On the other hand, economists warn that rising interest rates, one of the main tools used to contain inflation, should not fully solve the problem, since the problem this time comes from supply bottlenecks — such as the lack of electricity, exports growth and challenges in the production chain globally.