A survey carried out by Fundação Getulio Vargas’ Brazilian Institute of Economics (FGV IBRE), based on the 12 groups of products and services covered by FGV’s Consumer Price Index, indicates that the prices of key items related to Brazil’s July school holidays went up 3.81% on average in the 12 months to July 2024. In the same period, the Consumer Price Index (IPC-10) went up 3.88%.

The result was largely driven by higher prices of items in the “food and drinks consumed outside the home” group. If we exclude this group, “school break inflation” would have been around 2.7%, significantly lower than the actual result of 3.81%. In July 2023, school break inflation in the previous 12 months was running at 5.66%, while general inflation was 2.22%.

Matheus Dias, an economist at FGV IBRE, points out that the cost of enjoying the vacation period by eating out has risen considerably in the last year. This is reflected in higher prices of açaí (7.93%), sweets and snacks (5.65%) and restaurant meals (4.22%). Entertainment and leisure are also more expensive, with theater and movie tickets up 5.65% and 4.68%, respectively.

According to Dias, the higher prices of school break-related products are a consequence of services’ greater resistance to the disinflation process under way in the Brazilian economy. “Food service items covered by this survey, such as bars, restaurants and snacks, made the biggest contribution to vacation inflation. These items have been experiencing demand-side pressure since the pandemic ended, as well as supply-side factors, such as increases in food prices and pressure from the exchange rate. Retailers end up passing on higher input costs to end consumers as a way of maintaining their margins,” he explains.