A World Bank comparative study on prices and purchasing power has found that Brazil has the second highest cost of living in South America, beaten only by Chile.
But when it comes to household spending, Brazil drops to sixth place behind Argentina, Chile, Uruguay, Venezuela and Peru.
The study also found that the country with the lowest level of consumption per person was Bolivia, while Argentina, Paraguay and Bolivia had the lowest cost of living.
According to Eduardo Pereira Nunes, the president of the government statistical bureau (IBGE), which presented the results of the study, what happened in Brazil is that while inflation control kept the country from being the most expensive, inflation stabilization occurred with prices at a historic high.
"The dust is still settling after a period of violent inflation. What the World Bank study shows is that prices in Brazil have been stabilized but they have not fallen. Inflation is under control but we have not had deflation."
Nunes went on to point out that consumption is a function of income. The unequal distribution of income in Brazil means some Brazilians can buy very little because things are expensive compared to prices in other countries in the region.