Savings accounts lose to inflation for 10th consecutive month in Brazil

RIO DE JANEIRO, BRAZIL – The net yield of savings account, after discounting inflation as measured by the Broad Consumer Price Index (IPCA) over 12 months through June 2021, is a negative -6.26%.

This means that people who left their money invested in savings accounts during this period have lost purchasing power, according to a survey conducted by Economatica, a financial information platform.

Brazilian savers have been continually suffering accumulated losses in purchasing power since September 2020.

Therefore, the loss of purchasing power in June 2021 is the 10th in a row. The country had not registered a drop in purchasing power at such a level since October 1991. At that time savers lost 9.72% in 12 months.

Investment ranking

In the year, considering the period through June 2021, three stock market indexes have appreciation above the inflation measured by the IPCA.

Only the Small Caps index at 7.38%; BDRs (Brazilian Depository Receipts) at 6.07%; and the Ibovespa (São Paulo Stock Exchange) index at 2.67%; have yields above the IPCA while all other investments have lost purchasing power.

Gold posted the largest drop (-14.30%), followed by the Euro with a drop of -10.43% and the IFIX (Real Estate Investment Fund Index) at -7.5%.

In 12 months through June 2021, the Small Caps Index shows the best performance with a gain in purchasing power of 28.88% above the IPCA followed by Ibovespa with 23.12%. Gold shows the highest loss with -16.34% and the Dollar Ptax sale has the second worst performance at -15.69%.

In June, three of the sample indexes gained purchasing power: the Small Caps index had the best performance at 0.76%, followed by the IMA-B 5+ (Government Bond Index with maturity over 5 years) at 0.30% and the IHFA (Multi-Market Funds Index) at 0.17%.

Gold performed worst with a drop of -11.54% followed by the Euro with a loss of purchasing power of -7.87% and the dollar Ptax sale at -4.90%.