Inflation on brazil

1981-1993
GDP ↑ at an avg. annual rate of 2.9%
Per Capita Inc. ↓ 6%
Gross investment ↓ from 21 to 16%
Result of fiscal crisis & loss of
Public sector investment.
1980s “LOST DECADE” 1990s
Reached a record of
5times of the rate in 80s

The inflation rates as
seen in the previous 2
tables are based upon the
consumer price index
(CPI).
The index is a
measure of the
average price which
consumers spend on a
market-based
“basket” of goods and
services.
Inflation based upon
the consumer price
index (CPI) is the
main inflation
indicator in most
countries.
The CPI inflation rates
in the table are
presented both on a
monthly basis,
compared to the month
before, as well as on a
yearly basis, compared
to the same month last
year.

 Brazil’s consumer prices remain under pressure mainly on an
increase in transportation prices, which has been fueled by
higher public-transport fares in certain cities and increases in
gasoline prices.
 In recent days, inflation in Brazil experienced an additional
point of pressure, with the Brazilian real trading at about
3.00 to the dollar. This marks the weakest level of the local
currency since 2004, as concerns about the struggling
economy and political problems pushed investors to buy
dollars.
 The monthly inflation data came above expectations.
Economists expected an increase of 1.01% to 1.21%,
according to a survey by The Wall Street Journal.

 With faster price increases and the depreciation of the
Brazilian real versus U.S. dollar, analysts see room for the
central bank to raise its benchmark interest rate even more.
 Brazil’s Annual Inflation Hits Highest Level In Nearly 10 Years
 12-month consumer-price index was up 7.70% through
February
 SÃO PAULO—Consumer prices in Brazil rose more than
expected in February, putting the 12-month rate at the
highest level in nearly 10 years and underlining one of the
main challenges facing Latin America’s largest economy in
the year ahead.

Effects of Hyperinflation in Brazil
 Inflation rates were upto 3000%
Ex: A $3.00 loaf of bread costed $90+
 People would get paid and the value of the paycheck would
decrease by 30% while it was in their pocket on the way to the
bank.
 The money stock was reduced by 80%.
 The public sector nearly lost all of its monetary value.
 The new currency was launched in 1994 and substituted the
“cruzeiro real”: R$ 1,00 corresponded to CR$ 2.750,00. The
accumulated inflation until the implementation of real was of
815,60% and the first inflation registered under the new
currency was of 6,08%, a minimum record in many years.
 The currency of Brazil is –Real

Year CPI ROI (%)
1980 4 100%
1981 8 100%
1982 16 100%
1983 38 138%
1984 111 192%
1985 362 226%
1986 895 147%
1987 2,940 228%
1988 21,435 629%
1989 328,113 1,430%
Year CPI ROI (%)
1990 100,000,000 30,377%
1991 500,000,000 400%
1992 5,600,000,000 1,020%
1993 113,600,000,000 1,929%
1994 2,472,400,000,000 2,076%
1995 4,104,400,000,000 66%
1996 4,751,200,000,000 16%
1997 5,080,300,000,000 7%
Price Levels & Rate of Inflation in Brazil,
1980 to 1997

The Hyperinflation in Brazil, 1980-1994
Hyperinflation in Brazil was a fourteen-year
period of three-to-four-digit annual inflation
rates from 1980 until 1994.[1] It coincided with
the period of economic crisis and political
turmoil triggered by the 1970s energy crisis
during the Brazilian military dictatorship until
the conclusion of the main processes of the
democratic transition in the country in the late-
1980s/early 1990s.

 The annual inflation by year for Brazil -
comparing the December CPI to the December
CPI of the year before and the average inflation
by year for Brazil
 The average of 12 monthly inflation rates of a
calendar year

Table – historic inflation Brazil (CPI) –
by year
Annual inflation
(dec vs. dec)
Inflation Annual inflation
(dec vs. dec)
Inflation
CPI Brazil 2014 6.41 % CPI Brazil 2004 7.60 %

Table: average inflation Brazil (CPI) – by year
average inflation Inflation average inflation inflation

What are the causes
of Hyperinflation ?

 The debt to GDP ratio (towards end of the year) was raised to
43.4 percent in contrast to 43 percent last year.
 Trade surplus (for 2007) was brought down to USD$40.95
billion from USD$41.
 The National Monetary Council has set Brazil inflation target at
4.5% for the year 2007. The same target has been maintained
for the year 2008. The inflation targets should, however not be
confused with the bank lending targets.
 Estimated targets for the CPI or the consumer price index for
the year 2007 was reduced from 3.83% as compared to 3.86 %.

Solutions to the Hyperinflation

Brazil is the perfect example of what happens
when you have corrupt government officials &
military regimes that are in charge.
Our opinion is that if they had political
stability, hyperinflation wouldn’t have
happened or at least to the degree that it
happened.

BY
- Shresht Shetty (110)
- Riya Sawant (93)
- Sayli Shelar (104)

Inflation on brazil

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