Business

Is Brazil’s so-called ‘rent inflation’ on its last legs?

Rental contracts in Brazil are not adjusted each year by the official inflation rate — instead, they follow another index, which has ballooned due to increased commodities prices around the world

rent inflation
Photo: Andre Melo Andrade/Immagini/Folhapress

In the middle of 2020, with the coronavirus pandemic keeping Brazilians shut inside their homes, residential tenants were dealt an unwelcome surprise with the news that their rent would increase by around 18 percent in one fell swoop. Occupants were left perplexed by the size of the annual increase, given that the 12-month inflation rate stood at only a few percent. But in Brazil, rental contracts are not typically adjusted each year using the official Consumer Price Index (IPCA) — in fact, they use a different measure, the IGP-M, commonly referred to as “rent inflation.”

Despite its nickname, however,...

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