The cascade effect: Understand how skyrocketing fuel prices also affect those without a car | Economie

But the effects of higher fuel prices are not limited to drivers’ pockets: the pressure creates a ripple effect on the economy. (Watch the video above).

The logistics sector is one of the first sectors affected. Since 60% of what is consumed and produced in the country is transported by road, according to the National Transport Association, the impact of this sector ends up in other regions – and thus on the consumer’s pocket.

a Brazilfor example, is the world’s fourth largest producer of grains, such as rice, barley, soybeans, corn and wheat – products that are mostly transported by truck, and the freight rate is linked to the price of diesel oil.

In practice, this means that the prices of basic products, such as food, become more expensive and increase [ainda mais] The cost of living for the population.

From 2017 to 2022, for example, Basic items for the basic basket increased by twice the average worker’s income. Food and beverages posted a cumulative increase of 37%; housing 38%; transport overall, 36%; and only gasoline77%. Meanwhile, average worker earnings rose 19.7%.

All of these factors contribute to the increase in inflation, which accelerated to 1.01% in February. However, higher prices for basic products spread throughout the economy, reaching those that are corrected by inflation indicators.

To contain inflation, BC in turn tends to raise the base rate. in March , The Selic Index rose from 10.75% to 11.75% annually, the highest level since 2017. As interest rates rise, late credit card payments become heavier, and new mortgage contracts carry higher interest rates.

That is, with or without a car in the garage, at the end of the month Brazilians will feel the effects of the fuel increase on almost all of their expenses: on the breakfast menu, on the rent, on the electric bill, on beer at happy hour, and even pet food.