Brazilians are apprehensive about economy and personal financial condition -survey

RIO DE JANEIRO, BRAZIL – Brazilians are still apprehensive about the economy’s direction, and personal financial condition shows a new survey by the Brazilian Federation of Banks (Febraban), released on Wednesday.

Just over half of the 3,000 respondents (52%) do not believe that the personal financial situation recovers this year. About two-thirds (68%) do not expect a recovery of the Brazilian economy in 2021.

In a note, says Isaac Sidney, Febraban’s president, said that most of the numbers in the current survey, called Radar Febraban, are better than the survey done last March, but the population’s fear persists. “This scenario shows that we still need to persevere with structural reforms and the improvement of the economic environment in the country,” he suggests.

According to the survey conducted between June 18 and 25, although still high, pessimism in relation to the economy decreased from 75% of those consulted in March to 68%. The expectation of recovery in 2021 grew to 13%, from 9% in the previous survey.

More than half of the population (52%) thinks that unemployment will increase (70% before), 73% bet on rising inflation/cost of living (80% before), and 72% on rising interest rates (76% before).

About the financial situation, the percentages of those who do not believe that their personal financial situation will recover this year (52%) and of the most optimistic (23%) are practically the same as in the March survey.

If the financial situation improves, about one-third of those interviewed said they want to invest their extra resources in savings (32%) or another type of bank investment (34%). Spending on travel is the option of 29% of respondents and, for 27%, it is more interesting to invest in real estate. Spending extra money to improve your education and that of your family members is an option for 26% of the people.

Options such as renovating a house or buying a car were mentioned, respectively, by 24% and 19% of those interviewed. Less than a fifth cite the purchase of appliances and electronics (15%) and the hiring or improvement of health insurance (12%); the expectation for investment in insurance (car, home, or life) is 9%, and in buying a motorcycle is 5%.

Compared to the March survey, expectations advanced for most types of investments, except for those related to health insurance (down from 17% to 12%). The main changes in the ranking of expectations about investments were in relation to bank investments other than savings (a 7-point increase) and buying a car (an 8-point increase).

As for access to credit for individuals and companies, the contingent that believes in an increase (36%) is greater than in a decrease (26%), and for 33%, it will stay the same (these percentages were 30%, 35%, and 29%, respectively).

For 48% of those interviewed, people’s purchasing power should decrease, while 25% foresee an increase, and 23% consider that it will not change. In the previous survey, the figures were 64%, 16%, and 18%.

Febraban also asked about the image of financial institutions. More than half think that the institutions contribute positively to the development of the Brazilian economy (53%) – in March they were 51% – and to help the country, the population, and their clients to face the covid-19 crisis (52%) – previously they were 45%.

The number of people who see a positive contribution of the banks in relation to improving the quality of life of Brazilians reaches 45% (42% before), and 43% identify this positive contribution in the generation of jobs (40% before).

The federation also took the opportunity to determine what respondents think about open banking, a platform for sharing financial data under implementation. The second phase, which would start tomorrow, was postponed to August 13. The results of this part of the survey were not encouraging.

Open banking is unknown to 57% of respondents, while 41% have heard of it. After being told that it is “a system in which a person authorizes the sharing of his or her data and financial history among banks that he or she wishes so that the banking industry can learn about the customer’s profile and offer them new, more personalized products and services,” 45% expressed a positive opinion about the mechanism, 20% considered it negative, and 28% said it is neither positive nor negative.

The potential for open banking is 16% (people who “will definitely” join) and another 46% who “may or may not” join, while 30% said they “will definitely” not join.