Brazil: Consumer confidence falls to lowest level in more than five years in May
May 21, 2014
In May, the consumer confidence index published by the Getulio Vargas Foundation (FGV, Fundaçao Getulio Vargas) fell a seasonally-adjusted 3.3% over the previous month, which was a deterioration over the 0.8% fall seen in April. The index dropped from the 111.6 points tallied in April to 107.2 points in May and now sits at the lowest level since April 2009. May’s result reflected a generalized deterioration as the two components that make up the index deteriorated in May. Households’ assessments of the current economic situation fell to the lowest level since May 2009. In addition, consumers’ expectations for the future of the overall economy dropped to the lowest level that has been recorded since March 2009.
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.