Brazil’s Consumer Confidence Index (ICC) has surged to its highest level since February 2019, according to the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV Ibre).
In June, the index rose by 4.1 points, reaching 92.3 points, and displayed a consistent upward trend for the third consecutive month, averaging 89.1 points.
The boost in consumer confidence can be attributed to improvements in both the perception of the current economic situation and expectations for the future.
This positive sentiment was observed across all income brackets.
Notably, the intention to purchase durable goods in the upcoming months significantly drove the overall improvement, likely due to lower inflation and expectations of declining interest rates.
However, Anna Carolina Gouveia, an economist at FGV Ibre, urged caution, stating that it is premature to confirm a sustained improvement in consumer confidence.
The financial condition of families remains unsatisfactory, primarily due to high levels of indebtedness.
The rise in confidence was underpinned by advancements in the Expectations Index (IE) and the Present Situation Index (ISA).
The Expectations Index increased by 3.6 points to 104.0 points, while the Present Situation Index rose by 4.4 points to 75.7 points, reaching its highest level since the onset of the Covid-19 pandemic in March 2020.
Among the components of the ICC, the indicator measuring the intention to purchase durable goods witnessed the most substantial increase, reaching its highest level since October 2014.
The indicator reflecting optimism about the local economic situation also demonstrated positive growth for the second consecutive month.
While the surge in consumer confidence is encouraging, careful monitoring of future developments and the overall financial well-being of families is essential before confirming a sustained improvement in consumer sentiment.