Repercussions of Rising Temperatures in Brazil: Inflation Hit and Threats to Food Prices and Energy Tariffs
The punctual impacts of intense heat on inflation are already noticeable. According to analysts, high temperatures in the coming months, with the arrival of summer in December, increase risks for prices. The effects of the climate crisis can put pressure on items such as food and electricity. Heat has already affected the inflation of products like air conditioners. In October, prices rose by 6.09%, according to the IPCA (National Consumer Price Index), calculated by IBGE (Brazilian Institute of Geography and Statistics). It was the highest increase in three years, since October 2020 (10.54%). According to IBGE, the costliness can be associated with higher demand due to the heat and the historical drought in the Amazon, which hindered production in the state. High temperatures, associated with the climatic phenomenon El Nino, which alters the rainfall pattern in the country, can accelerate prices for climate-sensitive foods such as vegetables, legumes, and fruits. Analysts' radar also considers potential impacts of heat on electricity tariffs. High temperatures increase consumption and force the additional use of more expensive energy sources, such as coal, diesel, and gas-fired power plants. This can lead to tariff increases in the summer, according to experts.