Clipping of news on Brazilian Culture, Law and Citizenship
17/05/2013
This article was translated by an automatic translation system, and was therefore not reviewed by people.
Twenty years ago, the country recorded record high price: 2.477%, according to the official index of the IBGE
RIO - Imagine a country in which people have lost both the notion of things worth two pounds of cheese plate cost more than a camera, a pot of a pint of ice cream is worth more than a wall clock. Where to stock products was not only common, it was a necessity. A place where few even cared about brands of products consumed, since nothing missing, and still missing. Imagined?
This was the Brazil of 1993, when inflation reached its highest level, today unthinkable 2.477%, according to the IPCA, the official index calculated by the IBGE. Nowadays, inflation 5.8% expected by the market this year, according to the Focus Bulletin of the Central Bank, now worries the government, experts and the public. But two decades ago, this variation of a digit was not even the 6.2% average recorded in a week.
It was a society in which the wages were adjusted monthly and prices, rescheduled up to four times in the same 30 days - if not daily, in the case of some products.
- The government acted primarily price-fixing, which was practically the only possible tool. Each shock in the economy corresponded to a general shortage. Economic agents began to put a "fat" on prices, to defend themselves against possible losses on government plans - says the coordinator of Price Index IBGE, Eulina Nunes, responsible for the monthly survey of IPCA, the last day of series of reports "New habits, old problems", the site publishes GLOBE since Monday, to show how Brazil is reacting to the recent rise in inflation and interest.
Price changes affect intensely the consumption pattern of the people, evaluates the economist Gilberto Braga, Professor RJ-Ibmec:
- Purchases of opportunity were more frequent at this time. People bought when they saw a price particularly good, even if not needing the item.
Professor at PUC-RJ, economist Luiz Roberto Cunha explains that inflation began to spiral out of control with the oil crises (1973 and 1979), reaching close to 100% at the end of the 1970s.
- With that came the shocks and inflation in Brazil has had as main factor to own inertia, it was not a matter of supply and demand. The entire economy was tied to wage increases. The government benefited from this situation very much because its revenue was fully corrected for inflation, but their personnel expenses, no. The result is that the real income of the population fell - says.
Protection only for the wealthy
Even with constant readjustments, the wages do survive until the end of the month was a difficult task. Who could have resorted to financial market mechanisms of the time, accompanying inflationary madness.
- Who had applications was assured. There were applications with high liquidity, such as the so-called overnight. Functioned as a currency pegged always corrected up with inflation. The middle class had access to the hedged currency. Already the poorest had to receive the salary and literally run to the market - says Elson Teles, an economist at Itaú.
Source: The Globe - Online
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This article was translated by an automatic translation system, and was therefore not reviewed by people.