What is Inflation?

Inflation is the general increase in prices. When inflation rises, the same amount of money buys fewer things. That’s why R$ 100 today buy less than R$ 100 did 10 years ago.

How is it measured in Brazil?

The main index is the IPCA (Índice de Preços ao Consumidor Amplo), calculated by the IBGE. It measures the price variation of a basket of products and services consumed by families.

Why does it matter for your finances?

If your investments yield less than inflation, you’re losing money in real terms. Example:

  • Inflation: 5% per year
  • Savings: 6% per year
  • Real gain: only 1%

How to protect yourself?

  • Invest in assets that yield above inflation
  • Tesouro IPCA+ guarantees real returns
  • Diversify between fixed and variable income
  • Track the monthly IPCA