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With lowest inflation in Latin America, cost of breakfast still went up in Ecuador

Published on May 18, 2022

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The cost of the products that make up breakfast is an indicator that shows the increase in prices of some foods in Ecuador.

Although Ecuador’s inflation is the second lowest in the region, after that of Bolivia, the prices of some foods such as bread, milk and eggs have increased in the last year.

Annual inflation in Ecuador closed April at 2.89%, while in Bolivia the same indicator was 0.9%.

In Latin America, average inflation will reach 11% per year at the end of 2022, according to the International Monetary Fund.

The rise in prices in Ecuador is due to an increase in transportation costs (1.34%). It is followed by increases in food and non-alcoholic beverages (0.52%).

Ecuador is among the 20 countries in the world with the lowest inflation, according to the world map of the cost of living published by the British newspaper Financial Times.

Venezuela, with an inflation of 284%, and Argentina (55%) lead the list of countries where prices have risen the most in the last year in Latin America.

Colombia registered an inflation of 9.2% and Peru, 8%.

Inflation in Ecuador is lower than in other countries because the economy is dollarized, says Alberto Acosta Burneo, Editor of the publication Analysis Weekly.

“Inflation is not triggered because we cannot print banknotes, as other countries have done, such as the United States, which has resorted to excessive currency issuance to provide economic support to the population and its inflation is already at 8%,” he explains.

José Hidalgo, Director of the Center for Development Studies (Cordes), says the movement of food and beverage prices reflects the increase in the cost of imported supplies, due to the global logistics crisis and the war in Ukraine.

Breakfast got more expensive

What Ecuadorian households spend the most on is food and non-alcoholic beverages, such as bread and milk.

This type of product represents 24% of total household spending, according to the National Institute of Statistics and Censuses (INEC).

The importance of this group of products is greater in households with lower incomes, where its expense represents 39%.

The cost of the products that make up breakfast is an indicator that shows the pressures faced by households due to the increase in food prices.

With the exception of cereals, whose prices fell in April 2022, the prices of the products that make up the first meal of the day increased.

The components of breakfast that increased in price the most in the last year are bread (6.7%), eggs (7.6%) and milk (1.32%), according to the INEC.

Bread is on the list of products most consumed by Ecuadorians and has a weight of 5% in total household spending.

Uncertainty in sight

World food prices decreased by 0.8% in April 2022 from the all-time high reached in March.

This is evidenced by the index of the Food and Agriculture Organization (FAO), which measures the international prices of five basic products: cereals, oils, dairy products, meat and sugar.

In April, the FAO Price Index for vegetable oils decreased 5.7%, losing almost a third of the increase registered in March.

Although the FAO warns that food prices are still within historical maximum ranges.

Which would reflect a “persistent shortage of supplies in the markets,” according to Máximo Torero Cullen, Chief Economist of the FAO.

That poses a challenge to the food security of the world’s most vulnerable people, Cullen concluded.

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