Brazil’s official inflation, above the target ceiling stipulated by the . However, for many Brazilians, this number does not seem to reflect the reality of everyday life. Anyone who goes to the grocery store, fills up their car or pays for a health plan feels much greater erosion than official figures indicate. This discrepancy between reported and perceived inflation originates both from the way prices are measured and from the unequal impact that rising costs have on different consumption profiles.
the country’s main inflation index, measures price variation based on a standardized basket of goods and services. However, each family has a different consumption basket. In 2024, IBGE data showed that essential products such as meat (20.84%), soybean oil (29.21%), olive oil (21.53%), ground coffee (39.6%) and long-life milk (18.83%), had increases well above the general average. Meanwhile, other items rose less or even fell. The result is much more severe inflation for those who spend most of their income on food and fuel, making rising prices an even more suffocating experience for low-income families.
But it’s not just the nominal increase in prices that weighs on your pocket. , a practice in which products decrease in size, increases the feeling of loss of purchasing power. The consumer pays more for less without immediately realizing it. This occurs in sectors with little competition and especially affects those who do not notice subtle changes in packaging.
A study by the Brazilian Institute of Planning and Taxation (IBPT) revealed that, in 2024, reduflation reduced the size of products by an average of 20% without a proportional change in price, mainly affecting food, hygiene items and cleaning products. Notable examples include , whose packaging was reduced to 900 ml, increasing the real cost by 12.5%, and eggs, whose carton was reduced from 12 to 10 units, resulting in a 20% increase in the effective cost. In practice, the consumer takes a smaller cart home, without immediately realizing that they are paying more.
Food inflation has a heavy psychological and social effect. In addition to eroding income, it directly impacts food security and the quality of life of families. The result is a perception of inflation even higher than that recorded in official indices.
Given this scenario, the Central Bank has already signaled a possible cycle of rising interest rates to contain inflation. Raising interest rates may alleviate some of the problem in the short term, but it will not solve inflation that is largely fueled by . For Brazil to have a more stable economic environment and truly controlled inflation, it is essential to attack the root of the problem with debt control and those responsible. As long as public spending continues to put pressure on the economy and generate uncertainty, inflation will continue to weigh heavily on Brazilians’ pockets.
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