Economic Booms Leaves Brazil With Sticker Shock


In the wake of an economic boom, tourists and locals in Sao Paulo, Brazil are facing a bit of sticker shock, NPR reports. 

With the World Cup and Olympics on the horizon, Brazil has its fair share of excitement in store. However, the recent price inflation is certainly worth an explanation to the many tourists expected to visit Brazil for the events.

“Over the past few years, the country boomed. Incomes rose, and unemployment plunged to record lows. But the numbers are changing. Growth is slowing and inflation is creeping up. And the cost of food, especially, has jumped in the past year,” the report said.

Simone Camargo da Silva, a 35-year-old student, shops at a food market in central Sao Paulo. She jokes that potatoes, tomatoes and onions are “the price of gold.”

Produce alone has seen a large price increase. “Tomatoes have gone up 122 percent since last year, potatoes 97 percent, onions some 76 percent. The prices of services — haircuts, vacations — have skyrocketed, too,” according to NPR.

Robert Dumas, an economist at the Institute of Education and Research said the for the last 12 months, inflation has reached 6.6 percent.

The biggest reason for the increase in prices is due to increased demand, he said.

According to Dumas, Brazilians regularly fly to the United States to take advantage of lower prices.

To combat the increased demand, Robert Dumas suggests that there needs to be more direct investments in Brazil’s economy. Although resistant to the change, he said banks also need to raise their interest rates.

Restaurants have event reported completely removing ingredients from their menus entirely. Although adapting is difficult, owners say they will continue alter menus depending on how prices of certain items fluctuate.

(Photo by kashmut via Flickr)