With traditional Christmas dinner costing almost twice as much as 2021’s festive spread, Maria Magdalena Luna has decided to forgo turkey and the usual glut of gifts for family this year.

After months of enduring the highest levels of inflation in two decades, Latin American households like Luna’s are bracing for a prohibitively expensive Christmas.

No fancy meat. Few decorations. Lots of home-made cheer.

“We had to choose between food or gifts. There is not enough money for both,” said Luna, a 62-year-old homemaker, while visiting the Central de Abastos (Supply Center) in Mexico City, one of the largest produce markets in Latin America, where she hoped to find the best prices for Christmas dinner.

This year, families around the world are expected to spend up to 156% of their monthly income on Christmas celebrations, according to a study by money transfer service WorldRemit.

The study estimates that the Christmas meal will on average cost 50% more this year, a result of increased food prices linked to Russia’s war on Ukraine and supply chain issues.

“The cost of fuel also had a huge effect on inflation all year, while central banks adjusted their interest rates and the cost of imports increased,” Jorge Godinez, head of WorldRemit for Latin America, told the Thomson Reuters Foundation.

The rising cost of living in Latin America is expected to push 7.8 million people into food insecurity, joining the 86.4 million who are already at risk, the United Nations’ Economic Commission for the region (ECLAC) said in November.

Inflation has also hit households in richer nations.

In May, the World Economic Forum found one in four people were struggling financially across 11 developed countries.

Juan Carlos Navarrete, 52, supervises a stand in the Supply Center, where his frozen turkeys fetch 140 pesos ($7) a kilo and the salted cod goes for 320 pesos.

“Some foods are up to 40% more expensive than last year. Customers complain of the high price,” said Navarrete.

So families will make a host of sacrifices to ensure they can still sit down together and celebrate Christmas.

In Mexico, WorldRemit estimated that families will spend up to 206% of their monthly income on Christmas dinner, gifts and decorations.

“Sales have picked up this December, and we are finally recovering from the effect of the pandemic. Customers complain, but they are still buying,” said Navarrete.

This November, inflation in Colombia hit 12.53%, with the cost of food, drinks and transport taking the biggest hit.

As the country grapples with its highest inflation in two decades, many families will be looking to make savings and skip luxuries so as to afford their traditional festive dinner of ham, potato salad and cake, typically shared on Christmas Eve.

“I’m going to buy less ham and more chicken that’s cheaper. Every time I go shopping the price of potatoes and plantain has risen. Everything is more expensive,” said Daniela Hernandez, a 36-year-old mother of three children.

“I’ll try to spend less on Christmas presents because I want my family to have a nice meal together, which is important,” said Hernandez, a part-time teaching assistant in Bogota.

Families across Latin America have cut back on food expenses throughout the year, said Godinez, and have found ways to adjust to the rising cost of living.

“Families are not eating out or ordering delivery as much any more, and they have started to cook at home. They have also started substituting ingredients from the basic food basket for cheaper ones,” he said.

According to WorldRemit, Colombian families will spend 73% of their monthly income in the Christmas celebrations.

SHARING BILLS IN BRAZIL

Luis Octavio Barros, a Rio de Janeiro-based illustrator, and his extended family always get together for Christmas dinner.

Some dishes are so expensive that family members routinely split costs. Take the salt cod - both his dad and aunt chip in to ensure the family gets its festive favorite.

But this year, sharing does not go far enough.

With rising inflation, Barros expects new cost-cutting measures might have to be put in place.

“I think we’ll have less food,” he said. “There are also other ways ... (such as) substituting something expensive like the turkey for a less costly bird.”

In 2022, Brazil hit its highest inflation rate in 26 years due to upward price pressures on food and fuel.

All of which means a 9.8% increase in the cost of Christmas staples such as turkey, ham and sparkling wine, according to a survey by the Brazilian Association of Supermarkets.

And it is not just the big Christmas meal taking a hit.

Everyday items found on any Brazilian shopping list - onions, potatoes, eggs, wheat flour - all cost more now.

Barros, responsible for bringing the dessert and rice with lentils, is cooking both dishes at home to save cash instead of buying them ready made.

He also looks forward to the week after Christmas, when prices on festive food drops in store, hoping to stock up.

“Of course I’m doing it,” he said. “I know a lot of people who do it too.”—Reuters