RIO DE JANEIRO, BRAZIL – Consumer confidence in Brazil fell in November for the second month in a row, a survey showed on Wednesday, reflecting growing concern over the COVID-19 pandemic and its impact on the economy, and the looming end of emergency government income transfers.
Government officials have trumpeted the economy’s ‘V-shaped’ rebound from the depths of recession earlier this year and are bullish on next year, which they say could see the economy growing by 4% or even more.
But the Getulio Vargas Foundation’s (FGV) consumer confidence index for November suggests consumers are becoming increasingly cautious, with government support due to expire on December 31st and signs the pandemic is creeping back.
The index fell 0.7 points to 81.7 points in November, a second straight decline following a run of five increases from April’s record low 58.2, and slipping further back from the pre-pandemic level of 87.8 in February.
“With the probable end of the period of emergency benefits, many consumers who lost their jobs this year are expected to return to the job market at a time when companies will still be postponing hiring or firing, especially in the event of a second wave of COVID-19,” said FGV survey manager Viviane Seda Bittencourt.
Confidence about conditions fell 0.6 points to 71.8, and future expectations fell 0.9 points to 89.3, FGV said.
The economic expectations sub-index fell 3.8 points to 106.8, the biggest driver of the overall decline in future expectations, FGV said.
In related news Economy minister Paulo Guedes said Brazil is creating jobs in every region of the country, noting that the economy is recovering “extraordinarily well” as the COVID-19 virus has receded “substantially”.
In a virtual address to the Rio de Janeiro Federation of Industries, Guedes also said that record low interest rates are supporting exports and fueling a construction boom, and repeated his pledge that fiscal and economic reforms will soon replace emergency crisis-fighting spending measures.