Carnival in Brazil is more expensive this year
Economics
09 February 2018

Carnival in Brazil is more expensive this year

The average inflation for the most consumed items during festivities stood at 5.32% between February 2017 and January this year, above the inflation rate of 3.22% for the period, according to the Consumer Price Index (CPI) calculated by FGV’s Brazilian Institute of Economics (IBRE).

Revelers will soon realize that products and services are a little more expensive during Carnival in Brazil this year.  The average inflation for the most consumed items during festivities stood at 5.32% between February 2017 and January this year, above the inflation rate of 3.22% for the period, according to the Consumer Price Index (CPI) calculated by FGV’s Brazilian Institute of Economics (IBRE). The price hike during Carnival was driven by fuel prices, which have climbed over the past 12 months: gasoline prices rose 13.61%, while Vehicular Natural Gas (VNG) rose by 9.61% and ethanol by 4.02%.

If you are hitting the road or enjoying the street Carnival, the good news is that the price of drinks bought at supermarkets helped cool down the upsurge in other items. Distilled beverages (0.02%), beer (0.47%), and soft drinks and mineral water (1.55%) had no real increase, remaining below the inflation for the period, as well as meals in restaurants and bars, which increased by 3.15%.

“The heat should not scare revelers away, especially those who choose to bring a thermal bag to the party. The prices of drinks bought in supermarkets, or in bars and restaurants, have risen below the inflation rate. Even soft drinks and mineral water consumed away from home increased less than the CPI/FGV, staying at 2.97%. On the other hand, the prices of alcoholic beverages have risen more than two times the inflation rate, climbing 7.45%,” said economist André Braz, in charge of the survey and coordinator of IBRE’s CPI.

The average price increase for hotels, airline tickets, tours, and urban bus fares was lower than last year. According to Braz, with the economy showing signs of improvement, there is room for prices to climb this year.

“We expect the economy to heat up in 2018. Within this context, service prices tend to increase more, but not to a point that will threaten the inflation target, which remains at 4.5%. For now, we expect the CPI to rise to approximately 3.8% this year”, said the economist.