Consumer Confidence in Brazil falls in August for first time in 5 months – FGV

RIO DE JANEIRO, BRAZIL – Consumer confidence in Brazil shrank in August for the first time since March this year, as unemployment, inflation, and fears about the spread of the Delta variant of the coronavirus raised doubts among various income groups, data from the Getulio Vargas Foundation showed Wednesday.

The FGV’s Consumer Confidence Index (ICC) dropped 0.4 points in August to 81.8 points, a level considered low in historical terms. This was the first drop since March when the indicator read 68.2.

In August, the Current Situation Index (ISA) dropped 1.1 points to 69.8 points, while the Expectations Index (IE) had a positive variation of 0.1 points to 90.9.

“There is greater difficulty among consumers with lower purchasing power, who face a combination of high unemployment and inflation and the and growth of indebtedness in recent months,” explained Viviane Seda Bittencourt, coordinator of the surveys.

At the same time, the confidence of consumers with higher purchasing power also retreated in August, “possibly due to the increased uncertainty about the pandemic with the advancement of variant Delta in the country, adding doubts about the possible pace of economic growth in the coming months,” said Bittencourt.

According to FGV, the analysis by income brackets showed a generalized worsening of confidence, except for consumers with monthly income between R$2,100 (about US$400) and R$4,800, whose confidence was at its highest since December 2020.

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