Cost of Basics Up Despite Tax Cuts: Daily

By Ben Tavener, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The price of the cesta básica – the “basic basket” of essential foodstuffs – has gone up in all but two cities in the most recent monthly survey by the Department of Statistics and Socioeconomics Studies (Dieese). Sixteen state capitals saw prices rise for basic products, including Rio de Janeiro, despite tax cuts announced by President Dilma Rousseff in March.

The biggest price hikes were noted in Vitória (Espírito Santo), Manaus (Amazonas) and Salvador (Bahia), where the “basic basket” went up 6.01 percent, 4.55 percent and 4.08 percent respectively.

In Rio the increase was less, at 2.66 percent, meaning the monthly cesta básica would cost Cariocas R$314.99. At R$336.26, São Paulo continues to have the most expensive basket. Two capitals, Florianópolis and Natal, both saw costs go down.

On March 8th, President Rousseff announced that five of the thirteen products that make up the “basic basket” – meat (beef), butter, coffee, sugar and oil – would receive tax cuts. The other products are already tax-exempt.

It was projected the prices of some goods could decrease by as much as 12.5 percent, and indeed Diesse said that most of the prices of the products subject to the new tax cuts showed a reduction in price compared to March; for instance, oil was cheaper in sixteen capitals. However, other products have continued to grow in price, and therefore so has the overall cost of the basket of essential items.

As part of its monthly survey, the organization also calculates the minimum someone living in various Brazilian cities would have to earn to buy the cesta básica, as well as a line of things – such as housing, health, education, clothing and transport – necessary for living. For São Paulo, this came to just under R$2,825 or over four times the current minimum wage of R$678.

Read more (in Portuguese).

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