By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The latest consumer confidence survey in Brazil by the Instituto Brasileiro de Economia – IBRE (Brazilian Institute of Economy) at the Fundação Getulio Vargas Institute shows that the Consumer Confidence Index (CCI) retreated by 2.9 percent from February to March, going from 85.4 to 82.9 points, and reaching the lowest historic level for the third consecutive month.
According to the survey the number of consumers who say that the country’s economic situation is good fell from 5.8 percent in February to 4.5 percent in March, while those who believe that the situation is bad increased from 71.6 percent to 77.6 percent during the same time period.
“[Additional] to the economic factors, such as inflation and the labor market, Brazilian consumers are concerned with the turbulence of the political scenario and water and energy supply risks,” says Aloisio Campelo superintendent for economic cycles at the Ibre of the FGV Institute.
Expectations for the near future are also looking gloomy. According to the survey, the index that measures consumer optimism for the next six months decreased by 2.8 percent.
The number of consumers that forecast an improvement in their financial situation declined from 27.9 percent to 27 percent, while those who forecast that their situation would worsen increased from 10.5 percent to 12.9 percent from February to March. In annual terms, from March 2014 to March 2015, consumer confidence fell by 22.7 percent, the survey shows.
The widespread corruption scandal at Brazil’s largest company, Petrobras, along with rising inflation and a depreciating local currency has significantly affected Brazil’s economy. Forecasts for the country’s GDP and industrial production for this year are constantly being revised downwards and consumers are facing higher energy and water bills, in addition to higher food prices due to a water crisis in the Southeastern part of the country.