Brazil: Consumer confidence drops to lowest level since June 2009
January 24, 2014
In January, the consumer confidence index published by the Getulio Vargas Foundation (FGV, Fundacao Getulio Vargas) fell a seasonally-adjusted 2.1% over the previous month, which followed the 1.2% decrease registered in December. The index decreased to 108.9 points, which marked the lowest level since June 2009. January's result reflects that households' assessments of the current economic situation are more negative and that they have much lower expectations for the future of the economy.
The range of the FGV confidence index spans from 1 to 200 points, where 100 points is considered neutral. While consumer confidence remains above the 100-point threshold, a downward trend has been recorded in recent months, which does not bode well for growth in private consumption going forward.
LatinFocus Consensus Forecast participants expect private consumption to expand 2.3% in 2014, which is unchanged from last month's forecast. For 2015, panelists expect private consumption to increase 2.5%.
Author: Carl Kelly, Economist