The difference between the inflation of the poor and the rich will only fall in 2022, says Ipea

The difference between the inflation of the poorest and the richest should only be reduced in 2022. This is what a new projection by Ipea (Institute for Applied Economic Research) indicates.

In the pandemic, families with fewer resources felt a stronger advance in prices, with pressure from basic items, including food, electricity and cylinder gas.

In the 12-month period, up to October, inflation for the income group considered to be very low soared by 11.39%, according to the IPEA.

It is the most accentuated variation among the six layers of the population analyzed by the institute. The very low-income bracket comprises families with a household income of less than R$1,808.79 per month.

At the other end, there are families with income considered high (over R$ 17,764.49). Until October, they accumulated lower inflation in 12 months, of 9.32%.

In other words, the difference in relation to the poorest was 2.07 percentage points.

Ipea expected this distance to be smaller at the end of the year, due to factors such as the deceleration in food prices.

Expenditure on food, in proportional terms, weighs more on the pockets of the poor than on the budgets of the richest.

This deceleration, however, was less than expected, explains Maria Andreia Parente Lameiras, a planning and research technician at Ipea.

According to her, items such as eggs and poultry still exert great pressure on inflation, as well as tomatoes and potatoes, harmed by the adverse climate in part of the country.

In addition, the pockets of the poorest continued to be impacted by expenses with bottled gas, which rose with the rise in fuel prices No brazil.

“Mathematically, we were expecting that, in 12 months, the accumulated of the richest would be more or less stable and that the poorest would be decelerating, so that the curves would start to come together”, reports Maria Andreia.

“That’s not what we’re seeing. Both are accelerating. This gap [lacuna] is holding up.”

As the budget of the poorest is much more restricted, the money is especially directed to basic expenses for survival. This list includes food at home, electricity, cooking gas, public transport and rent.

The consumption of the richest tends to go further and also involves several services.

The services sector has been hit hard by restrictions on the brakes on Covid-19, because it brings together a wide variety of businesses that depend on the movement of customers. Bars, hotels, restaurants and beauty salons are examples of these companies.

With the advance of vaccination against the coronavirus, and the lower level of restrictions on activities, the heated demand for services tends to pressure inflation for the richest in the coming months, points out Maria Andreia.

In theory, this movement would also shorten the distance for the poorest.

“We expect this convergence for next year, with a deceleration for both the poorest and the richest. The deceleration for the poorest tends to be more intense, because the scenario for food is better, the crop projections are good. We will also be leaving the water scarcity flag, we will have a relief in the bill [de luz]”, indicates the technique.

“Inflation of the richest also slows down [em 2022], but due to pressure from industrial goods and services, it will not slow down as much. So, we should have a convergence, but only towards the end of 2022.”

In October, inflation in the very low-income bracket reached 1.35%. For the seventh consecutive month, the change in prices was more accentuated for these families.

The highest-income group, in turn, had inflation of 1.20%. The lowest mark in the survey (1.10%) was registered by upper-middle income families — between R$ 8,956.26 and R$ 17,764.49 per month.

The escalation of inflation worries economists in the country, mainly because the poorest layers of the population have less financial conditions to deal with the shortage of basic items.

During the pandemic, rising prices and difficulties in the labor market spread scenes of people looking for donations and even leftovers in Brazil.

In Fortaleza (CE), for example, a recent video shows a group looking for food in a garbage truck.

Other cases that became known were registered in Rio de Janeiro, where a truck was distributing leftover meat, and in Cuiabá (MT), which had queues looking for donations of ox bones.