Christmas shopping and dinner: What increased (and decreased) in price in Brazil

RIO DE JANEIRO, BRAZIL – High inflation is still a challenge for the budget of many Brazilian households. According to data released December 10, by the Brazilian Institute of Geography and Statistics (IBGE), official inflation has reached 10.74% in the past 12 months. The main villain is gasoline, which accumulates a rise of over 50% in 12 months.

But despite everything costing a little more, a survey conducted by the Getulio Vargas Foundation’s Brazilian Institute of Economics (FGV IBRE), showed that the price of some of the main items for Christmas dinner and on Brazilians’ gift list indeed increased, albeit to a lesser extent than the IPCA (Extended National Consumer Price Index), reaching 5.39% (IPC-DI/FGV from Dec/20 through Nov/21). By way of comparison, in the same period last year, Christmas inflation stood at 13.51%.

The rise in food prices drove inflation the most, with an average variation of 7.93% (IPC-DI/FGV from Dec/20 through Nov/21), although much lower than the same period last year (28.61%).

On the other hand, the price of rice fell (-8.27%), as did pork shank (-1.27%). Milk (0.81%), onions (1.87%) and fruits (2.84%) increased by less than last year. “The effects of problems with production costs suffered since last year, with droughts, frosts, high fuel and electricity prices are still being felt, particularly in proteins.”

“The high exchange rate, favoring meat exports, has also contributed to keeping protein prices high. However, it is good to note that the gradual return of rain has normalized the dynamics of various food prices such as rice, fruits, vegetables and legumes,” said FGV IBRE economist Matheus Peçanha, responsible for the survey. There is no specific data about raisins.

CHEAPER SECRET SANTA

Those who did not shop early for Christmas gifts on Black Friday but are still looking for items, will need to spend a little more than in 2020. The average price variation of the most wanted gifts reached 3.39% (IPC-DI/FGV from Dec/20 through Nov/21), compared to 1.39% last year and 1.28% in 2019, 1.71% in 2018, and 1.02% in 2017.

The largest contribution was from clothing items (4.80%), followed by accessories (2.57%), recreation and culture (2.13%) and appliances and electronics (1.73%). However, the researcher alerts that products that varied the most are also of lower value. Thus, with depressed income, high unemployment and uncertainty, and high interest rates, spending calls for caution.

“We are in a moment of gradual return, although the Omicron variant is on the radar, and it is natural to see people consume something that was frustrated this time last year, despite the inauspicious employment and income scenario. So it’s important to be cautious, to plan your consumption well and to use credit responsibly,” he said.

Peçanha adds that in order to save money, research is always essential. “Today technology makes this much easier, with search engines. It’s worth using discounts and joining forces with family, friends, or neighbors to buy in bulk and get a wholesale discount (using the wholesale market).”

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