Brazil’s 10% inflation is eroding incomes and the president’s popularity

BRAZILIANS ARE no strangers to inflation. In the mid-1980s people crowded around supermarket gates and, as soon as they opened, raced in to buy as much as they could carry. With inflation running on average at 300% that decade, it paid to be early. If an unlucky customer missed the morning rush, they would end up paying higher prices in the afternoon.

Today’s Brazilians are not yet racing down supermarket aisles, nor even stockpiling as much as their inflation-beset neighbours in Argentina. But poor and, increasingly, middle-class Brazilians are feeling the pinch. At 10.6% the inflation rate is among the highest in big economies, and the median income, adjusted for inflation, is at its lowest in eight years. Prices of petrol and ethanol, commonly used in Brazilian cars, soared by 47% and 62% respectively in 2021. Already inflation is one of the most important issues shaping a presidential election due in October. Fully 73% of people surveyed in one poll in January said Jair Bolsonaro, the president, has done a bad job of controlling it.

To cushion the blow Mr Bolsonaro has promised salary increases and is trying to lower fuel taxes. He has beefed up a welfare payment introduced by Luiz Inácio Lula da Silva, president from 2003 to 2010 and probably Mr Bolsonaro’s main opponent in the election. To do so, he persuaded...