Consumer spending expected to drop to 2015 and 2016 levels
The space for consumption is narrowing in Brazil and household spending should fall compared to last year, returning to levels seen in 2015 to 2016, when the country faced one of its worst economic crises, analysts say.
There are discouraging indicators. The unemployment rate is rising, inflation has accelerated, the coronavirus pandemic is claiming thousands of victims daily and pushing activities again to a halt, while the emergency aid aimed at informal workers is not reaching those in need.
A study by XP Investimentos, obtained by Valor, shows that the restricted retail sales calculated by statistics agency IBGE, which excludes vehicles and construction material, should fall 5.5% in the first quarter compared with the last three months of 2020. Considering the extended retail, which includes both industries, the drop in the period should be even deeper, of 6.5%.
The dynamics will be reflected in household consumption within the GDP, which may fall by 0.4% and 0.9% in the first and second quarters compared with the previous three months, according to XP. Part of the negative influence will come from March, which may show a 10% drop in the extended retail compared with February due to the health crisis and more restrictions to mobility.
"Multinationals are worried about the economic issues in Brazil, not only because of the pandemic. Especially those most exposed to commodity [prices]," says Ricardo De Carli, a partner at Bain & Company.
Specialists told Valor that higher volumes in the second quarter compared to the same period last year cannot be expected. Then, there was the basic consumption goods boom. "At least 55% of Brazilian families saw their income shrink and a recovery does not happen at the same pace as the resumption of activities," says Domenico Tremaroli Filho, director of NielsenIQ.
The most recent data surveyed by IBGE show that the average unemployment rate for 2020 was 13.5%, the highest since 2012. Inflation over 12 months measured by the Extended Consumer Price Index (IPCA) is at 5.2%, very close to the target range upper limit.
In this scenario, consumers are more fearful about the future and less willing to spend. In March, the consumer confidence index of Fundação Getulio Vargas's Brazilian Institute of Economy (Ibre) reached 68.2 points, the lowest since May 2020, when the federal government started paying the...
Para continuar a ler
PEÇA SUA AVALIAÇÃO