It’s something Brazilians rarely see in the past quarter century. And in 2016, it helped to establish , a president’s downfall.
Double-digit inflation.
Millions of poor Brazilians are struggling to survive due to the escalating prices of gas, meat, electricity, and other commodities. According to Friday’s data from the National Statistics Agency, the inflation rate in the twelve months ended September was 10.25%.
Francielle de Santana, 31, lives in Rio de Janeiro’s Jardim Gramacho neighborhood beside a massive former landfill. She can barely afford chicken because she doesn’t have running water or electricity and has to salvage scrap in order to make a living.
“With ten pesos ($1.80), we used get a lot. But now, we get only three to four pieces. Outside her wooden shack, de Santana said that it was too little for three to four people. “Rice used be three reais. Now it’s very expensive.”
Nearby, Leide Laurentino, a 73-year old retiree, was making drumsticks using a wood stove. According to the non-profit Petrobras Social Observatory in Brazil, September’s price of cooking gas was at its highest level in 20 years. Laurentino is rationing hers.
“If I cook only with gas, there will not be enough. She said that even for coffee, she uses firewood. “I can heat food up at night, but I don’t eat cold if it is raining.”
Higher oil prices reflect the higher cost of fuels as countries with many vaccines are able to evade the pandemic while resuming their lives with mobility. Other prices have been impacted by supply bottlenecks caused by increased global activity. The U.S. inflation rate was 5.4% per year in August, before slowing slightly in August. This is the fastest pace since 2008. September saw a 10-year-high U.N. Food and Agriculture Organization food price index.
However, there are also local effects that fuel Brazilian inflation, according to Andre Perfeito (chief economist at brokerage Necton).
The worst drought in nine years caused hydroelectric reservoirs to be depleted . This forced the grid operator and government to use more expensive thermoelectric plants, as well as to establish a “water scarcity power rate”. Imports were affected by one of the most severe currency depreciations in the world. Perfeito stated that price increases are more stubborn due to indexation.
