Brazil: Consumer and industrial sentiment hit five-month highs in May
Latest reading: The seasonally adjusted consumer confidence index published by the Getulio Vargas Foundation (Fundação Getúlio Vargas) increased for a third consecutive month in May, coming in at a five-month high of 86.7 (April: 84.8). As a result, the index moved closer to the 100-point threshold, indicating ongoing, but reduced, pessimism among Brazilian consumers.
Similarly, the seasonally adjusted industrial business confidence index rose to 98.9 in May, up from April’s 98.0. The print was also the highest in five months. As such, the index moved closer to the 100-point threshold, signaling reduced pessimism among industrial firms.
Outlook: Both consumer and industrial sentiment averaged above Q1 levels in April–May, suggesting that consumer spending and investment may have performed better in Q2 than in the prior quarter in sequential terms. That said, both were still in pessimistic territory, likely held hostage by elevated interest rates, prospects of additional rate increases and rising inflation; these drivers are likely to keep a lid on sentiment in the coming months.