This week, the Brazilian Institute of Geography and Statistics (IBGE) announced the country’s official inflation rate for 2020. With an overall increase in prices of 4.52 percent, the rise was steeper than market expectations and official targets, largely pushed by a 14.09 percent jump in food costs.
Indeed, what was the sharpest yearly increase in food prices since 2002 has taken a severe toll on Brazilians’ pockets. According to IBGE head researcher Pedro Kislanov, the pronounced food inflation came as a result of increased demand, the devaluation of the Brazilian Real, and commodity prices on the global market during the pandemic.
Prices of basic foodstuffs such as soybean oil and rice increased by 103.79 and 76 percent last year, respectively. Other major increases were seen in long-life milk (26.93%), fruits (25.4%), meat (17.97%), potatoes (67.27%) and tomatoes (52.76%).
Moreover, it is important to note that inflation does not affect every segment of the population equally. Low-income households spend a much higher percentage of their monthly income on food, meaning it is precisely the most vulnerable stratum of Brazil that is feeling the biggest pinch.
Meanwhile, Brazil’s minimum wage will increase 5.26 percent this year,...
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