By Jay Forte, Contributing Reporter
RIO DE JANIERO, BRAZIL – In general prices during Carnival for products and services are 7.42 percent higher this year than in last year’s five-day celebration. According to a report from the Consumer Price Index of the Getulio Vargas Foundation (IPC-FGV), the price hike is almost at the same level of inflation over the past twelve months, which accumulated 7.66 percent from February 2014 to January this year.
The Carnival jump is higher, however, than the 7.14 percent growth in the same period according to the National Index of Consumer Price (IPCA), calculated by the Brazilian Institute of Geography and Statistics (IBGE), which serves as a parameter to the “official” inflation.
Economist André Braz, of the Brazilian Institute of Economics of FGV (IBRE-FGV), explained that the costs related to products and services at Carnival were below the IPC-FGV because in January, prices of some items that have nothing to do with the celebration rose significantly.
This is the case with urban bus fares, the cost of school tuition and electricity. “So there are three factors that have impacted the acceleration of inflation last month, which pushed it a little ahead of Carnival,” Braz said.
He continues by saying that Carnival inflation data does not lose importance just because if reflects the celebrations, but that is “shows that the services, which are what is most important at this time, still pushing up inflation.”
The research identifies the highest increase is for breakfast (14.90 percent) – which brings together various items such as bread, butter and milk, among others. Also beverages have shot up, such as alcohol like beer and chope (10.89 percent) and soft drinks (11.62 percent), and unsurprisingly hotels (11.98 percent).
“All the reveler uses most in this period, or anyone eating out of home, both in bars and restaurants, [feel the increase] much more than average inflation. [It is] an increase of ten percent and above that,” said the economist. He emphasized that, in the case of beverages, the greater consumption is also encouraged by the typical heat of the summer season, which helps to raise the final price.