Brazil’s low and middle income households have highest inflation rates

RIO DE JANEIRO, BRAZIL – Inflation hasn’t slowed down only for the poorest income bracket in December last year, according to the Institute for Applied Economic Research (IPEA).

For the very low income segment, with a household income of less than R$1,800 (US$323), inflation rose from 0.65% to 0.74% from November through December, while for all other levels there was a reduction in the rate of inflation between the two months.

According to IPEA Planning and Research technician Maria Andréia Parente Lameiras, the rise in food prices was the main burden for the poorest segment of the population. In December, the highest index was registered in the highest income bracket: 0.82%. Nevertheless, there was a reduction in the rate when compared to November, when 1.02% inflation was registered.

In 2021, all income brackets showed a strong acceleration compared to the previous year. However, lower-middle and middle income households registered the highest inflation rates in 2021, at 10.4% and 10.3%.

For lower income families, the greatest pressure came from the housing group, impacted by the rises in electricity and cooking gas. For the higher income segment, the greatest impact came from the transportation group, due to the increase in fuel prices.

Although there was an improvement in the performance of food in the home in 2021, this segment continued to significantly influence inflation, particularly for the lower income brackets.