Curitiba has the highest accumulated inflation in 2021 among the capitals; understand the reasons and the impacts for consumers | Economy

Curitiba is with the highest inflation in the country in the year among the capitals where the Brazilian Institute of Geography and Statistics (IBGE) surveys the Broad National Consumer Price Index (IPCA).

According to IBGE, the prices of products and services in the city increased by 7.72% from January to August of 2021. The data were released by the institute on Thursday (9).

Experts heard by G1 pointed out that the high dollar and the water crisis are among the main reasons for the price increase in the period. See the analysis below.

Price increase in 2021

Curitiba is the city with the highest inflation among the capitals surveyed by the IBGE

Source: IBGE

Considering the accumulated in 12 months, between August 2020 and August 2021, the city also has the highest inflation rate, with 12.08%, while the national average is 9.68% in the same period.

In the monthly index, comparing the rise in prices in relation to July 2021, Curitiba had the third largest increase in the country, with 1.2%, behind Brasília and Vitória.

Inflation in Curitiba

AugustJan-Aug12 months
Food and Drinks0.77%6.44%15.07%
articles of residence0.36%6.7%12.34%
health and personal care0.3%3.87%3.47%
Personal expenses0.83%2.05%3.27%

To understand the reasons and impacts of inflation, the G1 heard experts on the topic. see below.

What are the reasons for the discharge?

According to experts, a series of conjunctural factors are causing the prices of some products to rise.

One is the high dollar. With the real devalued, products that have prices on the international market in dollars, such as oil, which is the basis for the formation of fuel or gas prices, become more expensive in the country.

The high dollar also impacts the price of food produced in the country. “Meat producers, for example, earn more by exporting than by selling domestically. Thus, there is less supply and prices tend to increase,” said Sandro Silva, economist at the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese) in Paraná. .

Agricultural inputs increased in price due to the rise of the dollar — Photo: Disclosure

THE drought and the energy crisis also favor higher prices. “With the water shortage, the government is resorting to an even more expensive tariff flag, which has a very large impact on the accounts,” said economist and professor at the FAE, Murilo Schmitt.

How do these factors impact prices?

According to economists, the rise of the dollar, the drought and the increase in fuels cause a chain reaction in other prices, for influencing the basic costs of various products or services.

In the case of the exchange rate, the devalued dollar impacts the increase in the prices of inputs and imported items.

“The rising dollar makes the price of fertilizers used in agricultural food production, for example, more expensive,” stated the economist at the Federation of Agriculture of the State of Paraná (Faep), Luiz Eliezer Ferreira.

The increase in the electricity and fuel bill also impacts freight and industrial production. “It’s a chain and the increase in prices is passed on,” said economist Murilo Schmitt.

Why is Curitiba with an above-average price increase?

According to specialists, there are several factors that can explain the above-average inflation in Curitiba since the beginning of the year.

One of the reasons is that Paraná is one of the states most affected by the lack of rain in Brazil. “The drought is very concentrated in the Center-South region of the country,” stated the economist at Faep.

Sandro Silva, economist at Dieese, says that Curitiba recorded an above-average price increase in 2021 because the economic effects of the pandemic were delayed in the city.

“The economic results of this sector were less impacted at the beginning of the pandemic, so it is possible that the inflation pressure that Curitiba feels now has been registered in other cities in the beginning of 2020”, said Silva.

Which prices rose the most in Curitiba during the year?

From January to August, some products had a high above the average in the city. The price of vegetables, for example, increased 40% in the period, three times more than the national average.

In the case of dairy products, the increase was 11%, almost double the national average.

Housing spending was also above average in the city. O rent price increased by 8.13% in the city, twice the national inflation. THE water and sewage fee increased 11% in the city, triple that of the rest of the country.

Curitiba also had above-average increases in the price of piped gas (high of 46.72%), in the gas canister (24.33%), in Gasoline (36%), in the diesel (31.16%).

What are the impacts of high inflation?

According to Lucas Dezordi, chief economist at consulting firm TM3 Capital, the rise in prices has a direct impact on people’s quality of life. “Wages, in general, do not follow this rise in prices, so there is less consumption capacity,” he said.

In addition, according to Dezordi, rising prices undermine people’s ability to pay debts. “Many people got into debt during the pandemic, people and companies. This has an effect on the ability to pay,” he said.

According to the economist, with the fall in the pandemic indices, it is possible that there will be pressure on the inflation of services in the coming months. “It’s a perverse scenario that should have consequences for the next few months,” he added.

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