Purchasing power of the new BRL 200 bill drops

posted on 09/07/2021 06:00

Created to supply paper money in emergency aid payments, the bill now buys products that fill three supermarket bags - (credit: reproduction/bc)


Created to supply paper money in emergency aid payments, the bill now buys products that fill three supermarket bags – (credit: reproduction/bc)

Fill up your gas tank, go grocery shopping for 15 days, or keep meat on your plate for at least two months. That was the consumer’s purchasing power with just a R$200 bill, a year ago, according to James Carneiro, 49, a resident of Vicente Pires. The scenario, however, has changed. “Now, I can’t even fill up half a tank with this amount”, says he, who, like 14.4 million Brazilians, is unemployed. Food was also more restricted. “Before, with R$ 200 we almost filled the supermarket cart, now we leave with two or three small bags in our hands. A really large purchase, with a full cart, is no less than R$800”, said the father of the family, who works odd jobs as a painter.

The increases pointed out by James are evidenced in the latest IPCA-15 (Broad National Consumer Price Index), released in August by the Brazilian Institute of Geography and Statistics. In the year, the index accumulated an increase of 5.81% and, in 12 months, of 9.30%. In the case of the food and beverage sector, the increase was 1.02% in August alone.

Launched a year ago, during the pandemic, to meet the need for paper money in emergency aid payments, the R$ 200 bill hardly passes through the hands of Brazilians. According to BC, 450 million R$ 200 banknotes were produced, but less than 20% were put into circulation.

“It’s easier to see a maned wolf than a 200 note”, jokes James Carneiro, referring to the typical animal of the cerrado whose print is on the bill. Although the banknote is difficult to find, the BC states that the banknote’s entry into circulation, as would happen with any other, occurs gradually and according to society’s demand. “The rate of use of the R$ 200 note has been evolving in line with expectations and will continue to be issued over the next few years”, informed the BC.

The bill’s purchasing power, however, plummeted. Yesterday, the Correio team visited one of the units of a large supermarket chain in the Federal District. The purchase, at R$201.42, included rice, beans, oil, eggs, chicken and other 18 items that fit into three bags.

Exchange

The main factor that has caused inflation is the rise of the dollar, says the director of Macroeconomic Studies and Policies at Ipea, José Ronaldo Souza Júnior. “The exchange rate has an impact on everything. When this rate becomes too high, production costs increase and prices rise,” he explained. As a second reason for the high prices on the shelves, Ronaldo points out the rise in the prices of commodities, mainly agricultural. “The rise in commodities has directly affected the price of food, driven by very strong international demand and by weather events that affected production,” says Souza Junior, referring to droughts and frosts.

Low-income Brazilians feel inflation in their pockets the most. The last National Survey of the Basic Food Basket, released in July by Dieese (Inter-Union Department of Statistics and Socioeconomic Studies), identified an average value of R$ 560.65 of the basic food basket in 17 analyzed capitals. The value is equivalent to 55.68% of the net earnings of the worker paid with a minimum wage (R$ 1,100).

The Abrasmercado index, from the Brazilian Association of Supermarkets, brings an even greater number. The Association’s June data show that there was an increase of 22.11% compared to May, from a national average of R$ 542.27 to R$ 662.17 in the value of the basket with 35 products of wide consumption in the supermarkets.

The purchasing power of the basket with a minimum wage is the lowest in 15 years. Based on the most expensive basket that, in July, was the one in Porto Alegre, Dieese estimates that the minimum wage needed should be equivalent to R$ 5,518.79, a value that corresponds to 5.02 times the current national floor. The calculation is made taking into account a family of four, with two adults and two children.

empty cart

List of items placed in the cart on 9/6/2021:
1 packet of 5kg rice
2 packets of 1kg beans
1 jar of margarine
1 pack of noodles
1 liter of oil
1 packet of 1kg salt
2 liters of milk
1kg of chicken breast
1 egg tray
1 yogurt tray
1 package of loaf bread
1 5kg package of sugar
1 cookie package
1 cheese tray
1 ham tray
1 shampoo and conditioner kit
1 detergent
1 washing powder
1 fabric softener
1 bleach
1 toothpaste
1 soap
1 pack of toilet paper

Total Value: R$201.42