Food weighed more for low-income consumers in 2013, according to IBRE

Food represented the highest weight on inflation for low-income consumers in 2013, accounting for 52% of the 4.98% increase of the Consumer Price Index Class 1 (IPC-C1) last year
Institucional
10 Janeiro 2014

Food represented the highest weight on inflation for low-income consumers in 2013, accounting for 52% of the 4.98% increase of the Consumer Price Index Class 1 (IPC-C1) last year - calculated by the Brazilian Institute of Economics (IBRE/FGV). The index detects gaps between the inflation rate for the whole population and for lower income families.According to IBRE's researcher, André Braz, in an article for the newspaper Jornal Econômico, regulated prices (such as electricity and transport) helped to contain a more significant advance in the index. The energy rate decreased 16.68% on average, in 2013, and the cost of transport retreated 2.21% on average last year for low-income consumers.For this year, Braz explains that the positive expectations for the Brazilian crop should contribute to keep food prices from rising like last year, but monitored services, in turn, may be adjusted, impelling an increase of inflation to low income consumers.The IPC-C1 for 2014 is expected to increase compared to 2013, due to the monitored services. As it is an election year; however, a greater weight might only be felt in 2015, he said. Energy, according to the FGV's economist, should also be a point of concern - in February, the 12 month rate will lose the exemption on tariffs, which occurred in February last year.Also according to Braz, besides the pressure of monitored items, free services might also contribute to higher inflation in 2014, due to the World Cup and elections.

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