Low-income families will feel the hit from inflation again in 2024

Food prices have a disproportional weight on the poor. Photo: Rubens Cavallari/Folhapress

Throughout 2023, low-income households in Brazil experienced relief regarding food inflation, with prices falling for five consecutive months after skyrocketing for most of the Covid crisis. The resilience of Brazil’s labor market and the continued growth of the wage bill were also factors that contributed to this lighter impact of inflation on poorer families. In 2024, however, economists warn that the phenomenon will not be repeated, mainly because of the impacts of El Niño on food production.

Prices rose 4.62 percent over the past year, according to the official index measured by the Brazilian Institute of Geography and Statistics, falling within the Central Bank’s target range for the first time since 2020. The 0.52 percent drop in food prices, driven by larger crops and lower production costs, was one of the main forces behind this result — a major relief after the 13.2 percent rise recorded in 2022 — but not everyone felt it the same way.

Each income group in Brazil experiences inflation differently, depending on their consumption habits. To understand these differences within the official inflation index (known in Brazil...

Fabiane Ziolla Menezes

Former editor-in-chief of LABS (Latin America Business Stories), Fabiane has more than 15 years of experience reporting on business, finance, innovation, and cities in Brazil. The latter recently took her back to the classroom and made her a Master in Urban Management from PUCPR. At TBR, she keeps an eye on economic policy, game-changing businesses, and people driving innovation in Latin America.