DAVID BILLER and DIANA JANTET
RIO DE JANEIRO (AP) – Brazilians have rarely seen this in a quarter century, and the last time they did it, in 2016, it helped orchestrate the ouster of the president:
Double-digit inflation.
As a result of soaring prices for gas, meat, electricity and more, millions of poor Brazilians are forced to make ends meet. Inflation in the 12 months to September reached 10.25%, according to data released by the national statistics office on Friday.
Francielle de Santana, 31, lives in the Jardim Gramacho neighborhood of Rio de Janeiro, next to a huge former landfill. With no running water or electricity, she collects scrap metal to make a living and can barely afford a chicken.
“For ten reais ($ 1.80) we got a lot, but now we only get three or four. It’s not enough for three or four people, ”de Santana told The Associated Press outside her wooden hut. “Rice used to cost three reales; it’s expensive now. “
Nearby, 73-year-old pensioner Leide Laurentino was roasting drumsticks in a makeshift wood-burning stove. According to the nonprofit social observatory Petrobras, the price of cooking gas peaked in two decades in September, and Laurentino is rationing his.
“If I cook only on gas, I won’t have enough. Even for coffee, I use wood, ”she said. “Sometimes at night I can warm up food, but if it rains, I eat it cold.”
More expensive fuel reflects higher oil prices as countries with plentiful vaccines abandon the pandemic and resume mobility. Supply bottlenecks as global activity increased, pushed up other prices. Before slowing down a bit in August, US inflation stood at 5.4% per year, the highest since 2008. The food price index of the UN Food and Agriculture Organization in September reached a 10-year high.
But there are also local effects fueling Brazilian inflation, said André Perfeito, chief economist at brokerage Necton.
The worst drought in nine decades has depleted hydropower reservoirs, forcing the grid operator to run more expensive thermal power plants and the government to impose electricity tariffs due to “water shortages.” One of the sharpest currency depreciation in the world has led to an increase in the cost of imports. According to Perfeito, the rise in prices will be more sustainable due to the indexation.
Although headline inflation had just entered double-digit territory, many specific positions were already in place. In the 12 months to September, electricity prices jumped 28.8% and cooking gas prices jumped 34.7%, according to data released Friday. The price of chicken increased by 28.8%, and red meat – by 24.8%.
Last week, Brazil was shocked by the front page of a Rio de Janeiro newspaper, which showed people digging in a truck full of animal bones. The photo was a punch to the stomach for a nation that loves barbecues.
Inflation is one of the factors affecting Bolsonaro’s approval rating – the lowest since taking office. In Brazil, the mental scars were left after the days of hyperinflation that ended in the mid-1990s. Formerly-elected President Dilma Rousseff was impeached in 2016 just months after inflation hit double digits and began participating in street demonstrations.
At the protests against Bolsonaro on Sunday, a year before his re-election, inflation was a common complaint.
Live on Facebook on Thursday evening, the president devoted a lot of time to inflation, showing pictures of food and comparing prices in Brazil to those in the United States.
“This crisis is observed all over the world, not just in Brazil. Some people think that I need to do more to contain inflation. What else to do? Give an example, ”he said. “And in some countries this is not just inflation, but a deficit. When are we going to get back to normal? I don’t know, it will take time. “
On October 4, central bank president Roberto Campos Neto said inflation likely peaked in September. Economists surveyed by the central bank expect it to be at 8.51% by the end of 2021 and then slow to 4.14% by the end of 2022.
This does not mean that poor Brazilians can rest in peace, Perfeito said; the expected slowdown is partly due to lower growth forecasts for next year.
Unemployment remains high, and the government’s pandemic social safety net, which has been a lifeline for about a third of the population, has already been cut and is due to expire this month. Experts warn of rising poverty, including Oxfam, which in July named Brazil as a new hotbed of hunger.
The pandemic has shed light on precarious workers and those who work informally, said Lauro Gonzalez, a professor at the Getulio Vargas Foundation who specializes in financial inclusion of the poor in Brazil. Many previously earned just enough not to be eligible for social benefits.
Including 19-year-old Jacqueline Silva, who lost her job selling refrigeration equipment last year, could not pay rent and moved to a squat in downtown Rio with her little daughter. She told AP that for the first time in her life, she pleaded, “I was dying of shame, but I had to,” and then began to receive gifts of diapers and basic food. She looked for any job, but so far without success, and joined the people who collect waste from the meat truck.
“At first I was very embarrassed, but now it has become almost routine,” Silva said while awaiting his arrival.
But the truck did not arrive, apparently due to the shock of the newspaper coverage. This meant that Silva and the other congregation had to find another source of meat – or not.
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AP video journalist Lucas Dumfries took part.
