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50% inflation in Portugal

OK, it’s only bread – not a grand part of anyone’s budget any more. But two years back a small loaf at the bakery was 80 cents. Now, today, it’s 1.20. 50% inflation.

It’s also not actually inflation, this is the change in the price of one item, not the general price level.

But that is – back when bread was an important part of budgets – the sort of thing that would produce bread riots.

Money printing is such fun, isn’t it?

23 thoughts on “50% inflation in Portugal”

  1. I’m not sure the money printing is manifesting itself in the price of bread going up so much. Maybe share prices, property prices and green boondoggles. Probably more to do with supply side shocks.

    That’s why it’s a good idea to differentiate between money printing (inflation caused by government) and aggregate price rises cause send by other factors. If you can’t clearly name the problem you can’t easily discuss the solutions

  2. When we wuz in Normandy, the bread shops all had signs saying “sorry about the increased prices, but our raw material costs have increased” . But I hadn’t noted the original prices.

  3. Bernie G
    That’s about the price of a French loaf – bottom of the range baguette. The bottom of the range prices are, I believe, set by the government. I believe that if you sell bread you must sell a bottom of the range baguette.

    This is intuition rather than fact, so beware.

  4. Not sure I’d like to eat the sort of bread that costs as little as EUR 1.20/loaf.
    In €’s about what I pay. A bara, like a thicker baguette’s 90¢. That’s oven fresh from the bakers. Supermarket baguette’s 52¢, oven fresh. And it’s all better than UK shit.
    As far as bread’s concerned, the UK’s had inflation lot longer than Europe. Must be the effect of Greggs.

  5. Until I came to live here, I always thought Spanish bread was lousy. Until I realised it was hotels serving yesterday’s to the tourists because they wouldn’t know any better.

  6. The bread I used to eat used to cost £1.50, but it went up to £1.95, so I switched to a supermarket brand that costs £1.20. So my bread inflation is negative!

  7. Tim, I’m probably wrong here and if so please put me right. If it’s only bread changing (say), then isn’t that a change in real resource values (ie bread) and not to do with value of money falling. I’m going on how inflation is stripped out of a CBA analysis unless it is different for some input eg building materials when you are doing the exercise on a road scheme set to last 60 years.

  8. I wonder what the price is of strong white bread flour is in PT.
    In UK it’s about £1.19 for 1.5kg in ALDI.
    Adding in cost for energy, yeast, sugar, butter, washing up etc – that’s about 4 * 375g loaves for £2.40 or 60p each.
    Time spent – around 10 minutes per loaf using the breadmaker.
    I can earn about £1 after tax in 10 minutes, so still better off working and then paying the baker.

    What is going on with the over-50s in the UK leaving the workplace – is it the same everywhere now or are jobs uniquely schit in the UK, because for quite a small amount of extra income you can pay other people to make your bread, deliver your meals etc.

  9. @Bongo

    The problem is for those who hjave saved to a pension (as they were told to/forced to) and have now reached the arbitrary limit of around £1m (not that pays much of a pension in the private sector, the rules are of course rigged for public sector).

    This means that many people in well paid jobs e.g. GPs, Surgeons, Hospital Consultants, Software Engineers find they are not only paying silly rates of income tax on what they earn (62%), but also paying massive penalties for exceeding the pension limit.
    In the case of NHS workers, opting out of the pension contribution is forbidden, so that escape route is closed.

    So many are deciding that an extra 5-10 years or so of retired life are well worth it, over more years of grinding moronicity at work, for no, or minimal, reward.

    Younger ones are looking to sunnier climes. The UK had a coup, now has a firmly Marxist government (with an ‘opposition’ that is even worse), and is probably irretrievably damaged.

    Oh, and the buffons want to provoke Putin into nuking Holy Loch. Atleast that’ll shut up the SNP.

    Anyone remember “Not Yet The Times” and the reason for the poor performance of the India cricket team….? Back then, I laughed.

  10. First sentence – yes. A change in one price is not inflation. Inflation is a change in the general price level.

    One of the things I mutter about there. Today, the price of bread? Pah. Back then? When the average working man’s diet was a gallon loaf of bread every day? That Marie Antoinette (I know, line in a play etc) of they have no bread? Let them eat cake etc – bread prices were really, really important.

  11. “First sentence – yes. A change in one price is not inflation. Inflation is a change in the general price level.”

    If that is in answer to my comment – thank God, I thought I’d got it wrong. Thanks Tim

  12. Sorry Tim, there’s an easy answer…

    The cost to stoke up te oven has… well… skyrocketed.

    And with 50% over a year you’re lucky.
    Here in clogland it’s 100+%, supermarket quality, with pizza joints and kebab shops closing because they simply can’t afford to keep the fire needed going.

    That *used* to be simply rent and Gouging Landlords……

  13. So money printing increased incomes to absorb 50% bread inflation?

    《bread prices were really, really important.》

    Isn’t this an argument for indexation?

  14. The government of Portugal is particularly good at manufacturing statistics to prove how wonderful they are. Trust your wallet more than the official CPI.

  15. i saw a squashy ‘organic’ loaf in a US supermarket at seven bucks last month. I did not buy it. Prices generally were outrageous and not because of the exchange rate. US 10% inflation seemed far worse than 10% in the UK.

  16. The government of Portugal is particularly good at manufacturing statistics to prove how wonderful they are.
    Aren’t they all. We got a self congratulatory one here that tourist numbers last year were at 98% of ’19’s. And tourist spending up 12%. However, that’s against a 30% increase in tourist pricing (hotel, restaurant etc charges) So not good news at all. I suspect Spain maybe pricing itself out of the holiday market.

  17. All these wonderful, wonderful baguettes on offer in Spain aren’t a patch on a loaf of Mother’s Pride.

    Almost all the sliced loaves on the UK supermarket shelves are made using the Chorleywood process. Most people agree that such bread is far inferior to a lovely fresh baguette, but the baguette is disappearing because after only a few hours it goes stale and requires maman to go shopping for bread twice a day, no longer a practical proposition for most people.

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