Brazil’s consumer prices increased 1.16 percent in September — the biggest hike for the month since the Brazilian Real was created in 1994. According to the Brazilian Institute of Geography and Statistics, 12-month inflation stands at 10.25 percent, reaching double-digits for the first time since 2016, when the country faced what was then the worst recession in Brazilian history.
As has been the case in recent months, the index was pushed upward by electricity prices, which rose nearly 6.5 percent. With hydropower reservoirs at dangerously low levels, the government has increased its use of thermal power plants, which are more polluting and expensive. Over the past 12 months, electricity bills have risen nearly 29 percent.
Car fuels and kitchen gas were also big contributors to the overall inflationary pressure on family consumption. As we showed this week, low-income families are finding it increasingly difficult to afford domestic cooking gas canisters, and are instead cooking with ethanol — which is highly dangerous and has led to an increase in life-threatening domestic accidents.
On the other hand, meat prices fell for the first time in seven months (-0.2 percent), in a movement possibly connected to a reduction in meat exports to China. At the beginning of September, Brazil reported cases of mad cow disease, which triggered an automatic suspension of exports following sanitary agreements between the two countries. “As exports were halted, availability increased on the domestic market,” said analyst Pedro Kislanov.