Food Inflation in SP is 10% Higher for the Poor
Food inflation in the city of Sao Paulo /Brazil is almost 10% higher among classes with lower family income, according to data from Fipe (Fundaçao Instituto de Pesquisas Economicas). In the 12 months to October this year, food prices among families with incomes ranging from 1 to 3 minimum wages (R$1,100 to R$3,300) rose by 14.26%. In the income bracket above 8 minimum wages (R$ 8,800), food inflation was 12.98% in the period.
This difference of 1.28 percentage points — equivalent to about 10% — was captured by the IPC FX, a new inflation indicator calculated by Fipe from the Consumer Price Index of the Municipality of Sao Paulo, for three income groups: 1 to 3 minimum wages, 3 to 8 salaries and more than 8 salaries. As food has more weight in the budget of the lower classes, general inflation was also higher for this group. The IPC FX rose 10.63% in the 12 months to October this year for families with income from 1 to 3 minimum wages. In the case of families with income above 8 salaries, the increase was 9.67%. For the intermediate income range, from 3 to 8 minimum, the percentage in 12 months was 10.38%…. –
One of the reasons for inflation to be higher is the recent rise in meat prices, according to economist Guilherme Moreira, coordinator of the IPC at Fipe. There are some specific items that had accentuated behaviors. In particular, in the semi-elaborated group, the meat attracted attention. Proteins have a large weight in this group of 1 to 3 minimum wages. Beef rose a lot, but so did chicken. Guilherme Moreira,
Data from Fipe show that the rise in meat prices in the 12 months to October impacted the three income brackets: 1 to 3 minimum wages Beef: +21.61% Pork: +0.08% Poultry: +38, 45% 3 to 8 minimum wages Beef: +21.28% Pork: +0.30% Poultry: +37.65% More than 8 minimum wages Beef: +21.47% Pork: +0.67 % Poultry: +38.12%…
Greater weight on the low-income budget The problem is that, although increases in meat prices affect all families, the impact on low-income families is greater. Fipe recalls that, while spending on food corresponds to 28.78% of the budget of families earning between 1 and 3 minimum wages, they cover only 17.63% of the expenses of those earning more than 8 minimum wages. For the intermediate range, from 3 to 8 minima, the weight is 23.62%. “When you say that general inflation was 10%, it means that this low-income family would have to earn 10% more to be able to consume the same thing,” says Moreira.
Pressure will continue Although financial market projections indicate more comfortable inflation rates in 2022, Moreira says that low-income families will continue to be pressured in the coming months due to food prices. “Energy, another source of pressure, should settle down a little early next year, but power will continue to rise. The relief should be small,” says the economist. “The meat will continue to rise,” he warns. In high-income groups, pressure is on transport Data from Fipe also reveal that, while lower-income families are pressured by food costs, high-income families are paying more to transport themselves.
In high-income groups, pressure is on transport Data from Fipe also reveal that, while lower-income families are pressured by food costs, high-income families are paying more to transport themselves. The IPC FX shows that transport inflation was 16.19% among families earning more than 8 minimum wages and 16.40% among those earning between 3 and 8 wages. In the range between 1 and 3 salaries, the percentage was much lower, at 9.24%. “The increase in fuel costs more for families with higher incomes, who have a car”, says Guilherme Moreira, from Fipe. In the 12 months until October, the price of gasoline rose 41.55% in the city of Sao Paulo, according to the foundation.
Food Inflation in SP is 10% Higher for the Poor - /10