The IMF reports that the prices of essential goods remain elevated relative to other products due to a series of global shocks, including the pandemic, the war in Ukraine, and conflict in the Middle East. This trend disproportionately impacts lower-income households and risks exacerbating global poverty and inequality as wage growth struggles to keep pace with the cost of living.
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In its latest World Economic Outlook, the IMF advises governments to prioritize targeted, temporary cash transfers to vulnerable households over broad price controls or general subsidies when responding to cost-of-living increases. The IMF notes that general price-capping measures can be between 3 and 22 times more expensive for state budgets and may exacerbate global supply shocks.
The 'Barómetro das Cidades' study, conducted by Fundação Francisco Manuel dos Santos, indicates that nearly 80% of respondents use their cars daily. The data suggests that public transport pricing is not the primary factor discouraging ridership, highlighting instead differences in perceived safety and community across different urban territories.
Service production prices rose 3.2% year-on-year in the second quarter, an increase of 0.8 percentage points compared to the previous quarter. The sectors contributing most to this rise were administrative and support services, as well as real estate, both recording 5.1% annual growth, while the hospitality and restaurant sector saw a 10% price increase compared to the previous quarter.