The general increase in prices made meat disappear from the table of Brazilians and led many people to do price research in the supermarket.
The impact of high inflation, however, goes far beyond the kitchen.
With rising costs, some families find themselves with no alternative but to cancel their health plan. Others have organized collective purchases to save on school supplies for their children and many have avoided leaving home, either because of the high prices at restaurants or the cost of fuel.
These are some of the stories that the BBC News Brasil report heard from Brazilians in different regions and give the dimension of what is behind the statistics — not only of inflation, but also of unemployment, indebtedness and income compromise. A scenario that should not change considerably in 2022, given the expectation of still high inflation (even if slowing) and stagnation of the economy.
From home ownership to rent (and BRL 700 in gas savings)
Those most affected are the poorest, but the middle class is also feeling the impact — and increasingly so. Data from Ipea (Institute of Applied Economic Research), which calculates inflation by income bracket, show that this was the group that faced the highest rate of inflation in 2021, between 10.26% (average) and 10.4% (medium-low).
Although higher, it was close to what the poorest experienced, also above 10% – a scenario quite different from 2020, when the significant increase in food prices caused inflation to skyrocket, especially for low-income families.
The increase in the price of fuel was what weighed the most on the middle class’ pocket last year.
The IPEA survey pointed out that the main pressures for the higher-income groups came from the transport group, which registered a 47.5% rise in gasoline and 62.2% in ethanol. For the sake of comparison, for low-income families, the greatest pressure came from the housing group, especially affected by the 21.2% readjustment of electricity and 37% of bottled gas.
For teacher Juliete Castro Oliveira, the rise in the price of gasoline was one of the factors that weighed on her to make a decision that would completely change the family’s day-to-day dynamics: put her own house for rent and move closer to the work.
When she got married, about 10 years ago, she applied for financing for a property in the José Walter neighborhood, on the outskirts of Fortaleza, and was used to moving to areas closer to the center because of work — until the pandemic came.
“In the third month of the pandemic, I went to look at my accounts and saw that I had money left over. I thought: ‘There must be something wrong!’. I went to redo it, but that was it.”
The reduction in fuel costs had made a big difference in the budget, as had the reduction in her four-year-old son’s school tuition and the suspension of the payment of the installments of the mother’s house loan, which she pays.
“I had never stopped to calculate, but there I realized that, working in three shifts, I could travel 43 km in a single day within the city”, says Oliveira.
When face-to-face classes resumed and gasoline exceeded R$ 6 per liter, she did not think twice about the opportunity to rent a property near one of the schools where she teaches.
“And it was still on a day when I spent more than an hour getting there (at work), I was stressed”, recalls the teacher with good humor, who says that the larger space of the new property and the prospect of a gain in quality of life also played a role in the couple’s decision.
After about two months, she has no regrets. The difference between the cost of fuel before and after the move is an impressive R$ 700, which pays part of the rent in the new house.
The rental income from the property itself has been used to pay the financing installments.
“At the end of the month, I saw that it paid off. Now I can eat more at home, it is also less expense, and there is the issue of quality of life”, she highlights.
Mothers of ‘detachment’
Also in an attempt to cut costs, she and her husband have taken turns to drop off and pick up their son from school. This is because the value of school transport, impacted by the rise in fuel prices, was another expense that jumped. “It’s almost school tuition.”
Families with children, in fact, do not lack strategies to save in the face of rising prices and tighter incomes. Oliveira cites groups of mothers who get together on social media to sell and exchange products they no longer use — a habit that has already spread across different regions of the country.
In Brasilia, biologist Sula Salani learned about the “mothers of detachment” when she was pregnant with her child, just before the start of the pandemic. Today, you don’t make a purchase without first consulting at least three WhatsApp groups where hundreds of mothers buy, sell and donate new and used products.
One of them even organized an informal shopping club, where mothers get together to buy in large quantities, looking for discounts, and split the shipping. “I’ve already bought a shoe for R$40, which usually costs more than R$100. We save on school supplies, clothes, cleaning supplies — it was one of the ways we found to get around (the high prices).”
From the health plan to the health posts
With less disposable income and a significant increase in spending on transport, energy and food, in order to maintain basic expenses, many families were forced to cut expenses — and often those that were not superfluous.
A survey carried out in July last year by the Locomotiva Institute showed that air travel and meals in restaurants were the items that Brazilians had to give up the most because of the crisis. In third place came the health plan: about one in four respondents (26%) who used the service claimed to have canceled it.
A resident of São Paulo, Andréa Carvalho, 55, found herself in this situation recently, when the monthly fee for her plan reached R$1,600.
“The price has gone way up for my age. And it’s not a ‘fancy’ health plan, it’s basic.”
Now, she goes to health centers when she needs care and medication, another item that has weighed heavily on her budget.
“But many times I can’t even find simple drugs, like dramin and paracetamol, at the posts — they’re in short supply,” he adds.
In parallel, the change of habits for her also reached the kitchen — and not just hers. Carvalho is part of an NGO that donates lunchboxes and has had to change the menu a few times because of the prices of ingredients.
“At first it was the meat, but also the other inputs: rice, beans, cabbage — a vegetable that should be cheaper — it’s all very expensive”, she says.
“So we had to change the menu again. We started by making mincemeat, then we made feijoada. Now we’re going to try to make a chicken stroganoff, anyway, whatever we can.”
Food and health have also weighed heavily on the budget of retired Alzira de Souza, 65, who also lives in São Paulo. For her, one of the alternatives has been to cut back on leisure. With the increase in the price of fuel and transport by application, she leaves the house less and less.
“I don’t usually go out to eat out anymore. Before I used to do it a lot; now I rarely do it, because the prices in the restaurants are also very expensive”, he says.
As the manager of the building where she lives, she has also seen costs soar in the last year. Spending on items such as water, electricity and gas more than doubled. The last assembly of residents was difficult: “Last year we didn’t make any adjustments because of the pandemic, which was very strong, there were many unemployed people, but this year we couldn’t leave without a raise”.
Big bill, little income
The unemployment rate has been falling consistently since May, having dropped from 14.7% to 12.1% in the quarter ended in October, the most recent data from the IBGE’s Continuous Household Sample Survey.
This reduction, however, has been due to the generation of more precarious jobs, which pay lower wages. The scenario is visible when looking at the income indicator of the same survey: in the quarter ended in October, the average income of those who were employed was 11.1% lower than that recorded in the same period in 2020.
This dynamic has been compressing the disposable income of families, as shown by another indicator, this time from the Central Bank. In September (the most recent data), the commitment to family income reached its maximum level since the beginning of the series, in 2005. About 26.8% of all family income —which includes not only work, but other sources and also benefits such as emergency — it was used to pay debts, including loans, financing and credit card expenses.
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I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
