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Currently at 6.5 per cent, Brazil’s inflation is at the upper limit of President Rousseff’s target of within two points of 4.5 per cent..Dado Galdieri/Bloomberg

When Monica Tostes and her family renovated their apartment in Rio a few years ago, she insisted on one thing: A pantry.

Space might be limited here in one of the world's most expensive real-estate markets, but she needed somewhere to store the haul from the massive shopping trip she does at the start of each month. Ms. Tostes shops for her husband and two children as if Armageddon is coming – a leftover habit born in the country's era of hyperinflation.

"In those days you would go to a supermarket and take something from the shelf and the guy with the sticker machine would take it from you and re-price it," recalls Ms. Tostes, a 44-year-old civil servant.

"And we live with the fear that those times could come back again – you have to buy something today because five days from now it will be more expensive. And if it's a big thing like a television, you won't be able to buy it at all."

It has been 20 years since Brazil slew the "dragon," as it is called here, of hyperinflation. But the effects still linger, and coupled with a still-simmering inflation rate pose a serious risk to an economy that has slowed to a near-standstill.

At 6.5 per cent, inflation remains elevated and regularly makes headlines, the focus of fierce debate during the recent national election and on bar stools across the country.

Gilberto Braga, a professor of finance at the Brazilian Institute of Markets and Capital, calls the current rate "severe, very high." Because Brazilians continue to have a "spend while you can" mentality traceable back to the days of hyperinflation, today's economy suffers from low savings rates and high levels of debt, Mr. Braga added.

Though other emerging economies have even higher inflation, Brazil's is high enough that when people go to stores, they notice the price hikes, particularly on food. After payday at the start of each month, Brazilian supermarkets are a snarl of lineups and elbows-out grappling for scarce carts. Beyond shopping in bulk, Brazilians have a fondness for paying for items in many small instalments (one can buy everything from breast augmentation to a toaster in parcelas).

Inflation was a central issue in the national elections that ended in a second term for President Dilma Rousseff earlier this month. And the very first thing the Central Bank (which is closely tied to government) did, after the election, was an interest-rate hike aimed to tamp down inflation.

"The people who are in key positions today, who are critics, authorities, people who influence public opinion, they all lived through hyperinflation," said Flavia Avila, a behavioural economist and consultant for the Instituto Akatu in Sao Paulo.

Bernardo Mueller, who teaches economics at the University of Brasilia, said that aversion to inflation makes keeping it low "a policy imperative that supplants any other," and Brazilians are willing to accept high surpluses and reduced spending to avoid it. "They grumble, but they understand."

When Brazil's military dictatorship ended in 1985, the country had already been living with hyperinflation for five years. The new democratic government embraced an ambitious plan of "social inclusion" that dramatically increased spending – and over the next 10 years inflation soared, hitting 2,477 per cent a year at its worst, in 1993. It was finally reined in, in 1994, with the introduction of the real as the currency and a sweeping stabilization plan. Every government since has had an inflation target, and surpasses it at its peril.

Ms. Rousseff's target is to within two points either side of 4.5 per cent. So the fact that inflation is now 6.5 per cent was a major focus for her opponents during a long and ugly election campaign.

Meanwhile, Brazilians are outspending their incomes. Those in the middle class spend on average 15 per cent more than they earn, Ms. Avila noted.

"Brazilians don't think in term of annual wages: They think 'How much can I spend to get through this month,'" said Prof. Braga. "In other countries, people are culturally used to thinking of wages annually." Today, salaries continue to be indexed to inflation, as are a host of other costs from rents to bus fares, adjusted annually, which in itself creates inflationary pressure.

"People lost their grip on the value of money," said Reinaldo Domingos, the president of a financial education consultancy in Sao Paulo who has designed a school program.

"Our parents taught us, 'First you pay off everything you owe, then, if you have anything left, you can go and be happy.' So when we do have spare cash, we spend a bit more. We have no saving habits."

And the implication for the economy is a disaster, he added. "Families don't have savings, which makes them dependent on running up debt," said Mr. Domingos. "Instead of putting money in the economy, we are putting money into banks."

Editor's note: A previous version of this article stated that Brazil's middle class spends 50 per cent more than they earn. The correct figure is 15 per cent. Also, behavioural economist Flavia Avila was no longer employed by Instituto Akatu at the time of publication on Nov. 18, but she remains a consultant. The article said she was "with the Instituto Akatu." The institute is in Sao Paulo, not Brasilia, as reported.