Brazil: Consumer confidence drops to lowest level in nearly five years in April
April 25, 2014
In April, the consumer confidence index published by the Getulio Vargas Foundation (FGV, FundaÃ§ao Getulio Vargas) fell a seasonally-adjusted 0.8% over the previous month, which contrasted the timid 0.1% rise seen in March. The index dropped from the 107.2 points tallied in March to 106.3 points in April, which marked the lowest level since May 2009. April's result reflected that households' assessments of the current economic situation deteriorated over the previous month, after having improved slightly in March. In addition, consumers' expectations for the future of the economy fell to the lowest level since February 2010.
The FGV confidence index spans a range from 1 to 200 points, where 100 points is considered neutral. While consumer confidence is still above the 100-point threshold indicating optimism, a virtually-uninterrupted downward trend has been in place since the index reached its peak in April 2012, which does not bode well for growth in private consumption going forward.
LatinFocus Consensus Forecast participants expect private consumption to expand 2.0% in 2014, which is down 0.2 percentage points from last month's forecast. For 2015, panelists expect private consumption to increase 2.1%.