Inflation affects not only our purchasing power, as we pay more for the same quantity of goods and services, but also our savings, when our investments begin to earn less than inflation. This can occur (and has occurred) when the interest rates paid on financial investments are kept artificially low while inflation remains relatively high.
In particular, higher inflation affects the poor much more than the rich. On the expense side, since the poor spend a much more significant portion of their budget on essential items, it is much more difficult for them to cut expenses. On the income side, even when salaries are adjusted for inflation, this is generally done based on past variations. In a scenario in which inflation is accelerating (showing a larger variation each year), the increase in income ends up always being lower than the change in the prices of goods and services.
An example of this: in 2013, inflation as measured by IPCA was 5.91%. If your salary is adjusted by this percentage, but inflation is already around 6.5%, this means that the increase in income does not keep pace with the increase in product prices.
As for investments, the poorer population, when it manages to save (few people do…), has almost no access to more profitable investment products. Normally, they have access only to savings accounts, investment funds with steep management fees, and other fixed-income securities (such as CDBs) with low returns (normally around 80% of CDI for investments of R$ 100). In this case, the only exception may be Tesouro Direto.
The richer population, on the other hand, in addition to having greater ease in exchanging more expensive goods and services for cheaper ones, can access financial products with better returns, such as investment funds with management fees of 0.5% per year, LCIs and LCAs, CDBs with rates above 100% of CDI, etc.
To illustrate this issue of the real interest rate, in the graph below we show the annual real interest rates, that is, the nominal return less the change in inflation (we use IPCA because it is the official index). In the case of CDI, we also deduct income tax at a rate of 15%. In the case of savings accounts, only returns from 2013 onward refer to the new rule.
What we can clearly observe is that real interest rates have fallen significantly from last year to the present. In 2018, with the Selic rate being kept at its lowest level since the beginning of the Plano Real, CDI will offer a net return of only 1.70%. Savings accounts, on the other hand, will have a real return of only 0.90%.
