Good morning! Today, we talk about the unusual behavior of Brazilian income. The government’s tax revenue woes. Bolsonaro’s putschism becomes more real. And the Supreme Court’s landmark decision on indigenous rights.
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Income is finally rising above inflation
Since November of last year, Brazilians’ average habitual real income has been rising faster than inflation, a rather unusual occurrence. In more than a decade, the only time that happened was at the beginning of the pandemic, when Congress approved an aid program to help vulnerable families survive during Covid closures â but that was a short-lived bump.
The data. To make the following chart, we used “average habitual real income,” which tends to smooth out seasonal fluctuations. We compared its growth in 12 months to Brazil’s official IPCA consumer price index.
Why it matters. Most Brazilians suffered brutal income losses during the pandemic, which aggravated a years-long process of eroding purchasing power. They are now recovering from the shock, and the fact that inflation has eased (from being in the double digits between...