Return of inflation in 2021: See how price hikes affected the economy and the pockets of Brazilians | Economie

In the 12 months through November, the Extended Consumer Price Index (IPCA) It reached 10.74%. In the month it reached 0.95%. The highest rate for November since 2015. For 2022, financial markets expect inflation above 5% and the target will be exceeded for the second year in a row.

“If we add the sharing of all energy drinks [elétrica e derivados]We found nearly 50% of the overall IPCA score,” said economist Andre Bras, of Fundação Getulio Vargas (FGV).

In practice, inflation has reduced the purchasing power of the population, adjusted wages without real gains, and increased poverty in the country. As a result, many Brazilians find it difficult to purchase essential items from the staple food basket, such as rice, beans and meat, the famous dish made.

Check out the main factors responsible for inflation for this year below:

After shooting 14% in 2020, Food prices have continued to rise this year and rose by another 7% between January and NovemberAccording to IBGE.

In the countryside, climatic problems contributed to higher prices, such as droughts and prolonged frosts, which damaged the country’s important crops.

• Drought, frost, and lack of livestock on pastures: the disparity in food prices in 2021 explained by the countryside
• High inflation and low emergency aid reduce the quality of the dish made by the poorest people in Brazil

“The most significant food price shock of the year has been. Ana Maria Braga has returned to using the tomato necklace [para discutir a alta de preços em fevereiro] Ettore Sanchez, chief economist at Ativa Investments, said the country faced a sharp rise in the value of meat.

In addition, the reduced supply of livestock has put pressure on meat prices – causing the food to become a condiment on most Brazilians’ plate and, in extreme cases, prompting people to search for bones discarded from slaughterhouses. Some supermarkets even sell animal protein with a burglar alarm system.

Some of the highest-priced foods in 2021 were chicken, eggs, beef, sugar, coffee and tomatoes. Soybean oil, whose prices doubled in 2020, has slowed the rally.

In November, the “Food and Beverage” group recorded a contraction (-0.04%). According to the IBGE, the result is due to the cost of eating away from home (-0.25%). The most relevant declines were in the prices of long-life milk (-4.83%), rice (-3.58%) and meat (-1.38% per month, but with an increase of 6.98% per year).

On the other hand, there were increases in November in the prices of onions (16.34%), ground coffee (6.87%), refined sugar (3.23%), chicken nuggets (2.24%) and cheese (1.39%).

The appreciation of the dollar against the real made the imported products that arrived in Brazil more expensive, such as fuel, durable goods and a large part of the basic components of the industry, for example.

• Agribusiness records and growing hunger in Brazil: how can this happen at the same time?

Exports also became more profitable and attracted local producers, who preferred exporting foodstuffs produced here over selling them in the local market. In this case, the law of supply and demand applies: if there is a shortage of products and an excess of demand, the price rises.

That is why Brazil is going through a period of high inflation and low economic activity at the same time, explained Andre Braz, of the FGV: “Demand has increased outside Brazil, causing prices to rise here as well.”

Until the last day 21, the US currency has accumulated An increase of 10.63% against the riyal since the beginning of the year.

One reason for the high inflation this year was the water crisis, the worst in 91 years, as a result of poor rainfall in the southeast and midwest region of the reservoirs, which accounts for 70% of parental power generation.

The operator of the National Electrical System (ONS) had to activate the thermal plants to ensure energy savings this year. However, thermal plants are more polluting and expensive, which has led to an increase in the cost of power generation in 2021, which is transmitted to consumers through tariff flags.

• High Energy: See the questions and answers about the flag system and weight on your electric bill

The last flag was placed in August: A “Water Scarcity Tariff” which adds 14.20 BRL to bills for every 100 kWh consumed. It is still in effect in Brazil today, with the exception of low-income families.

In November, the National Electric Energy Agency (Aneel) reported that the electricity bill for consumers is included in The social electricity tariff will have a green tariff flag – the cheapest.

In November IPCA, housing costs were again under pressure from electricity (1.24%). Household spending in this sector has accumulated 31.87% in the past 12 months.

The main villains of inflation in 2021 were fuels, due to the rising dollar and increasing global demand for oil. And those who think that they are not affected by not having a car are mistaken: the rise of the commodity directly affects the transport and logistics sector – Impact on costs in almost all sectors of the economy.

The barrel is overvalued, to a large extent, because when the pandemic began in early 2020, Countries that export the most oil have cut production. At that time, reducing supply was a way to prevent the price of a barrel from dropping too much. This year, with the resumption of activities, demand increased, but production has not yet occurred. Economists explained that what you have to buy is becoming more expensive and worth more dollars.

In the 12 months through November, fuel prices rose more than 40%. In the case of ethanol, the cumulative increase was approximately 70%. Gasoline rose 50% In this period, according to the IBGE.