More Brazilians Begin to Feel the Squeeze As Cost of Living Rises

According to a survey by Datafolha, six out of 10 Brazilian families say their salaries don’t cover their expenses, as President Bolsonaro scrambles to alleviate their plight ahead of October’s elections

More Brazilians Begin to Feel the Squeeze As Cost of Living Rises
June 27, 2022 | 08:01 PM

Bloomberg Línea — The proportion of Brazilians who feel they no longer have the same purchasing power has grown again, with six out of 10 people surveyed telling Datafolha they feel financial constraints at home, according to a survey published Sunday.

In total, 63% of those surveyed said that their family incomes are insufficient. A year ago, the figure was 55%.

The survey was conducted June 22-23 and interviewed 2,556 people, with a 2% margin of error.

The number of Brazilians who feel their purchasing power has fallen reached an all-time high of 67% in July 2016.


In the latest survey, 32% of those interviewed said that their family income is “exactly what I need to survive”, while a year ago the figure was 39%.

Amid the discontent, President Jair Bolsonaro is scrambling to enact measures to alleviate the situation, ahead of the October presidential elections.

According to a Genial/Quaest poll released earlier this month, 44% of those surveyed said the economy is the country’s main problem, and of which 23% see inflation as the main issue.


The same poll showed that 28% of voters consider President Jair Bolsonaro to be the main culprit for inflation, while 56% of respondents said the country’s economic situation will “influence a lot” their vote for president.

Bolsonaro is currently in second place in all polls since the beginning of last year, behind former president, leftist Luiz Inácio Lula da Silva.

The Datafolha poll released this Sunday showed that 63% of Brazilians believe inflation will increase. In March, this figure was 74%. A year ago, it was 46%.

Inflation has been breaking records this year, having reached 12.13% in the 12 months to April, the highest rate since 2003. In May, it slipped back to 11.73%, but was still at its highest levels in decades.


Fuel price hikes and food insecurity

Fuel prices have caused the greatest ire, with continuous price increases by Petrobras (PETR3; PETR4). Last week, the state-owned company announced a 5.18% increase in the price of gasoline and a 14.26% increase in the price of diesel.

Prices have risen across the board, with vegetables up 69.9% year-on-year, while electricity bills have increased by 20% over the period.

Furthermore, the number of people suffering malnutrition has reached 33 million this year, which is the same level as 30 years ago, while 58% of people are in a situation of food insecurity.


The average value of the basic food basket reached 663.29 reais ($123.66), about 55% of the minimum wage, and which is the highest percentage since 2004, according to data from socioeconomic studies department DIEESE.

In recent weeks, the government negotiated with the Senate for the approval of a law that limits fuel tax applied by the country’s state to 17%.

However, Bolsonaro wanted to reduce the states’ fuel tax levy to zero, sending an initiative to Congress to amend the Constitution and create a reimbursement program for states that stopped charging the tax on fuel.

The measure was considered inefficient, and useless as a measure to counter the rise in fuel prices, which has been caused by other factors besides the tax burden, including the price policy of Petrobras, which follows the variations of the international market, which has been impacted by Russia’s invasion of Ukraine.


The government now wants to further increase the value of Auxílio Brasil, a subsidy paid to families, from 400 reais ($76.36) to 600 reais ($114.53), in addition to creating a 1,000-reais ($190.89) voucher for independent truck drivers and for buying cooking gas. The total cost of these measures would be 30 billion reais ($5.72 billion), according to Brazil’s Economy Ministry.

Translated from the Portuguese by Adam Critchley