“Children’s Day” inflation is lower than general inflation
A study by Fundação Getulio Vargas’ Brazilian Institute of Economics (FGV IBRE) shows that the prices of products and services most consumed on Children’s Day (a commemorative date in Brazil, celebrated on October 12 every year) went up 6.18% in the last 12 months. This is less than 9.19% general inflation in the same period, as measured by FGV’s Consumer Price Index – largely caused by weather problems, which have particularly affected food and energy items.
Out of all goods and services related to Children’s Day, the “services and leisure” category saw the biggest price rise, 7.63%, driven by the “trips and vacations” item (21.22%). According to FGV IBRE researcher Matheus Peçanha, airline tickets influenced the increase in this item. “The cost of kerosene and Brazil’s exchange rate, as well as resumption of demand, especially in July, impacted airfares. The good news in services is that despite the reopening process, ticket prices at cinemas, concerts and theaters have remained the same in the last 12 months,” he says.
When it comes to gifts, the 11 most popular products went up 2.04% in price on average. The biggest increases involved metal and textile goods: sporting goods (8.6%), bikes (6.95%), TVs (5.89%) and children’s shoes (5%). Shortages of raw materials in these industries restricted supply, which generated inflationary pressure. On the other hand, books (-0.94%) and cell phones (-1.13%) both went down in price.
According to Peçanha, despite some reasons to celebrate, caution is called for at this moment. “Job market conditions are still very unfavorable for most families. Unemployment is nearly 15% and recovery of confidence related to the resumption of services and trade is still weak. As a result, the economy is tepid and many fathers and mothers are outside the labor market, meaning they are not yet in a position to spend,” he says.