Poor people feel almost twice as much inflation as rich people in January

The inflation felt by the poorest Brazilians was equivalent to almost double that observed among the richest at the beginning of 2022, according to a monthly study released this Tuesday (15) by Ipea (Institute of Applied Economic Research).

In January, the increase in prices reached 0.63% for families with very low incomes. Meanwhile, high-income families had inflation of 0.34% over the same period, the institute says.

According to Ipea, the rise among the poorest was influenced especially by the high price of food and beverages. The segment accounted for almost half of the inflation of the group with fewer resources (0.31 percentage point).

The purchase of food usually consumes a larger share of the budget of families with lower incomes. Therefore, rising food prices weigh more heavily on the pockets of the poorest.

In January, there were increases in products such as carrots (27.6%), oranges (14.9%), bananas (11.7%) and potatoes (9.7%), in addition to meats (1.3%), coffee (4.8%) and soybean oil (1.4%).

The rise in in natura food occurred amid the adverse effects of the climate in the country. While states like Minas Gerais and Bahia felt the reflexes of intense rains, the South region will experience a drought at the start of 2022.

The IPEA study measures inflation according to six household income brackets. Families with a very low income receive less than R$1,808.79 per month.

The other end of the list is occupied by high income, whose members earn more than R$ 17,764.49.

At the margin, the six bands had deceleration in prices from December to January. That is, the increases continued, but at a slower pace on average.

In very low income, inflation went from 0.74% to 0.63%, the highest in the survey. In the highest layer, the rise in prices jumped from 0.82% to 0.34%, the lowest in the survey.

In part, the loss of breath in prices for the richest was influenced by the declines in fuels, such as gasoline (-1.1%) and ethanol (-2.8%), airline tickets (-18.4%) and of transport by application (-18%).

High in 12 months is higher for lower-middle income

The Ipea study also brings the accumulated 12 months up to January. In this segment, the highest inflation was that of low-middle income families, with a rate of 10.8%. Until December, it was at 10.4%.

The lower-middle income group is made up of Brazilians with a household income between R$2,702.88 and R$4,506.47 per month.

The second largest variation in 12 months is observed in the middle income bracket (10.6%), which includes families with earnings between R$4,506.47 and R$8,956.26. In these groups, there are strong influences from transport and housing inflation.

The rate accumulated by very low income was 10.5%. It is above the variation registered in 12 months by the high-income group, of 9.6%, the lowest in the study.

“Disaggregated data reveal that, for lower-income families, the greatest inflationary pressure in the last 12 months resides in the housing group, impacted by the readjustments of 27% in electricity tariffs and 31.8% in bottled gas. For the higher income segment, the focus is on the transport group, reflecting, above all, in the 42.7% increase in gasoline and 55% in ethanol”, says the research.

“In addition to the increase in these two groups, it should be noted that food at home, especially the readjustments of 10% for meat, 21.7% for poultry and eggs, 44% for sugar and 56.9% for coffee, also caused significant upward impacts on inflation in the period, especially for the lower income groups”, he adds.

Last year, Ipea started to project that the difference between the inflation of the poorest and the richest would be shortened throughout 2022.

In addition to a slowdown in food prices, which still put pressure on consumers with lower incomes, the institute was betting on an acceleration in the prices of services, which weigh more heavily among the richest.

Persistent inflation causes concern in the country. As reported by the leaf last week, the advance in prices became more widespread throughout the economy in recent months. Thus, Brazilians decided to review their routine, with cuts in daily consumption, and postpone plans, such as courses and trips.