INPC mostra leve desaceleração da inflação para famílias de baixa renda em março

Inflation continues to weigh on the wallets of Brazilians, particularly those from lower-income families. The National Consumer Price Index (INPC) reached 0.64% in March, showing a slight decrease from 0.77% in February.

The INPC, a measure by the Brazilian Institute of Geography and Statistics (IBGE), tracks the variations of the cost of goods and services for Brazilians with incomes of no more than five minimum wages. Therefore, this percentage represents how much prices of products have increased for these families in the past month.

This phenomenon is known as inflation, and the INPC measures the inflationary variation only for the portion of the population within the income limit mentioned above. In contrast, the Broad National Consumer Price Index (IPCA) is considered the country’s official inflation measure due to its broader scope.

In March, the INPC increased in all 16 participating state capitals, with Porto Alegre (1.37%) and Brasília (1.10%) showing the most significant increases. With these results, the index has increased by 1.88% this year and by 4.36% over the last 12 months.

Despite being high, these numbers are still lower than the previous period. The indicator had increased by 1.71% in March 2022 and 5.47% in the immediately prior 12 months.

When compared to February, INPC increased in 9 out of the 16 surveyed locations. However, there was still a national average decrease. Here are the results by capital:

1. Porto Alegre: 1.37%
2. Brasília: 1.10%
3. Curitiba: 1.06%
4. Belém: 0.91%
5. Rio Branco: 0.80%
6. Goiânia: 0.75%
7. Vitória: 0.73%
8. São Luís: 0.72%
9. Campo Grande: 0.72%
10. Aracaju: 0.70%
11. Recife: 0.56%
12. Rio de Janeiro: 0.56%
13. São Paulo: 0.48%
14. Fortaleza: 0.39%
15. Salvador: 0.34%
16. Belo Horizonte: 0.26%

With the new survey results, INPC inflation over the last 12 months until March reached 5.60% in Salvador, 5.45% in São Paulo, 4.73% in Aracaju and Fortaleza, 4.58% in Recife, and 4.52% in Belém. These cities all had percentages above the national average.

The high levels of inflation continue to adversely affect the most vulnerable sectors of society. The burden of inflationary increases is felt acutely by lower-income individuals, as they have less disposable income to cope with growing prices. This scenario could lead to widespread hardship, particularly for the vast majority of Brazilians who have already been hit hard by the COVID-19 pandemic.

The Brazilian government must tackle the issue of inflation, particularly with measures that could alleviate the situation for the most vulnerable ones. This could be achieved, for example, through cash transfers, food subsidies, or targeted actions that support small businesses and families.

While boosting the economy can be an efficient way to address inflation, it is critical to implement measures that prioritize vulnerable sectors’ needs. At the same time, central banks can intervene in markets to stabilize prices by increasing interest rates, for example. However, this might be a last resort as a higher interest rate could potentially slow down the country’s economic recovery and hurt those who have suffered the most throughout the pandemic.

In the face of these challenges, Brazilians should remain resilient and stay informed on the latest economic developments. By doing so, they could make better financial decisions and reduce the impact of the economic situation, particularly for those most in need.