100 reais in 1994 were worth 13,91 reais; Inflation destroys Brazilian income

Despite gaining strength during the pandemic, inflation is a word that has haunted Brazilians for decades. It represents a general increase in the prices of goods and services in an economy, which in practice is felt when the purchasing power of a population ends up decreasing.

To understand how the importance of the word is obvious and affects people's financial situation, a 100 reais note can no longer buy so much these days.

In relation to July 1994, when the value of the note was purchased for 13,91 reais. Over the last 28 years, the accumulated inflation rate has not been less than 653%.

But what does that mean?

In short, the devaluation of the real shows that to buy the same thing that was bought for 100 reais in the 1990s, it now costs 748 reais.

The data was brought by Bruno Imaizumi, economist at LCA Consultores. In them, one can see how much the purchasing power of the Brazilian population has decreased over time.

Inflation in Brazil

The income of Brazilian workers did not decrease due to inflation. For example, paying for basic food, transportation and fuel may not be possible today. In some states, cooking gas costs 130 reais, while a liter of gasoline still costs 7 reais.

With regard to the basic food baskets that make up food needs, data from the Inter-Union Department of Statistics and Socioeconomic Research (Dieese) show that 777 reais are paid for the state of São Paulo.

“We have had moments when inflation is above 10%, there have been some spikes, but nothing has gotten out of control. The drop in purchasing power is normal in any country, so people need to look for investments”, explains Rafel Bevilacqua, chief strategist at Levante Investimentos and ways to protect themselves from this loss.

The economist also highlighted that there are several points in the economy that are related to inflation, such as people's salaries and rental contracts. The best thing to do is to deindex them to make it easier to reduce high prices, which, according to Bevilacqua, may not be easy to put into practice today.