MercoPress. South Atlantic News Agency

Lower-income groups less affected by Brazil's inflation

Higher-income households were impacted to a lesser extent in the transportation category because of the 5.3% drop in airline tickets

Inflation in Brazil decelerated for all income brackets in the month of March, according to a report from the Institute for Applied Economic Research (Ipea) released Friday, Agencia Brasil reported.

According to the study, which breaks down the National Wide Consumer Price Index (IPCA) by social class, the lowest-income families were those who benefited the most.

Ipea's Inflation per Income Range Indicator showed that inflation for very low-income families totaled 0.53% in March. The highest rate was for upper-middle-income families: 0.81%.
The full Ipea rating for March was as follows: Very-low income 0.53%; Low income 0.65%; Lower-middle income 0.76%; Middle income 0.80%; Upper-middle income 0.81%; High income 0.69. Total IPCA: 0.71%.

When compared to March 2022, there was a strong deceleration for all social classes, but the reduction was more intense for families with a lower purchasing power, mainly because of the reduction in food prices. Except for fish, poultry, and eggs, the other food items registered lower price variations in March 2023 in relation to March 2022.

In the accumulated 12-month period ending in March, upper-income families had the highest inflation (6.44%). The lowest inflation was registered in the lower-middle income segment (4.38%). Among very low-income families, the index reached 4.60%.

Influenced by the 8.3% hike in gasoline and 3.2% hike in ethanol prices, the transportation group exerted pressure on inflation for all income groups. However, higher-income families were impacted to a lesser extent because of the 5.3% drop in airline tickets and the 1.6% drop in car insurance fees.

The 2.3% hike in electricity rates impacted mainly lower-income families. In the health and personal care group, lower-income families felt the 0.72% hike in personal hygiene products, while those with higher incomes were influenced by the 1.2% hike in health insurance plans.

The higher-income segment was also influenced by the personal expenses group. Mainly by the 0.32% readjustments in personal services and 0.55% in recreation services in March.
With IPCA placing inflation in March at 0.71%, below February's 0.84%, the yoy rate stood at 4.65%, a figure below 5% for the first time in two years. (Source: Agencia Brasil)