Brazil: consumer confidence reaches the highest level since October 2022, says FGV-Ibre
The Consumer Confidence Index (ICC) of the Brazilian Institute of Economy of the Getulio Vargas Foundation (FGV-Ibre) rose 1.4 points in May to 88.2 points, the highest level since October 2022, when it registered 88.6 points.
In quarterly moving averages, the index increased for the second consecutive month, now by 1.2 points, to 87.3 points.
According to FGV-Ibre economist Anna Carolina Gouveia, consumer confidence was motivated by improved expectations for the coming months after the accommodation in April.
This draw was also widespread among income brackets, except for families with higher purchasing power, whose prospects worsened.
“The result may be associated with relief from inflation in the short term, the resilience of the labor market, and the increase in the minimum wage.”
“In parallel, however, the scenario of high family indebtedness, expensive credit, and economic uncertainties help to keep the indicator at a low level and sensitive to constant fluctuations, making it difficult to get a clearer signal of a sustained recovery in confidence,” says Anna Carolina Gouveia.
In May, according to FGV-Ibre, the rise in confidence was influenced by the improvement in prospects for the coming months, with the Expectations Index (IE) advancing 2.8 points to 100.4 points, the best result since March 2019 (101.1 points).
On the other hand, the Current Situation Index (ISA) retreated 0.8 points to 71.3 points after increasing more than 2 points in March and stabilizing in April.
Among the items that make up the ICC, the indicator that measures the outlook on family finances in the coming months was the one that most influenced the improvement of the index, with a high of 5.2 points, to 105.3 points, its best result since January 2019 (108.7 points), highlights the FGV-Ibre.
After two relatively stable months, the indicator that measures the degree of optimism with the general economic situation rose 3.7 points to 116.1 points.
Concerning the intention to buy durable goods, there was a drop of 0.6 points to 79.9 points.
Among families, the confidence of three of the four income brackets rose in May, motivated mainly by improved expectations for the coming months.
Only the consumers with the highest purchasing power, with income above R$ 9,600.01, showed a drop in confidence, with worsening prospects in both time horizons.
After the 7.9-point retreat in April, consumers with family income below R$2,100 recovered part of their confidence, influenced mainly by the improvement in the outlook for family finances and the local economic situation for the coming months, and advanced 6.1 points in May.
Only consumers with family incomes between R$4,800.01 and R$9,600 showed an improved assessment of the current situation.
With information from Valor
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