RIO DE JANEIRO, BRAZIL – High inflation and loss of income are draining Brazilians’ savings accumulated during the most critical phase of the coronavirus pandemic, when the payment of emergency aid to the poorest and the reduction of consumption led to a significant increase in savings rates.
Recent statistics show a sharp drop in savings flows and suggest a strong correlation of the trend with the decrease in workers’ income in recent months, economists say.
Calculations by Cemec-Fipe Professor Carlos Antonio Rocca indicate a negative flow of R$13.8 (US$2.4) billion in families’ savings in September, in a broad indicator that includes deposits in savings accounts, investments in shares and other financial applications.
The drop was higher in savings accounts with balances under R$5,000. Only savings accounts with balances over R$50,000 registered a positive flow, according to data from the Credit Guarantee Fund compiled by Rocca.
Estimates from the latest Inflation Report, published by the Central Bank on Friday, December 17, indicate a 7.6% income loss this year through September, discounting inflation. The figure includes salaries, pensions, social benefits and other revenue sources.