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Brazil consumer confidence posts third biggest fall as COVID-19 spreads

Published 03/23/2021, 08:34 AM
Updated 03/23/2021, 08:35 AM
© Reuters. FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in Rio de Janeiro

By Jamie McGeever

BRASILIA (Reuters) - Consumer confidence in Brazil registered its third largest monthly fall on record, a survey indicated on Tuesday, hammered by a deadly second wave of the COVID-19 pandemic and near collapse of the public health system in several cities.

The Getulio Vargas Foundation's (FGV) consumer confidence index fell 9.8 points to a 10-month low of 68.2 points in March, The current situation index fell 5.5 points and the expectations index tumbled 12.3 points, FGV said.

There have been only two steeper monthly declines since the data series began in 2005: October 2008, at the height of the global financial crisis, and April last year as the first wave of the global pandemic virtually shut down the entire economy.

Graphic: Brazil consumer confidence - https://fingfx.thomsonreuters.com/gfx/mkt/xlbvgxzmlpq/conscon.png

"The COVID-19 immunization campaign remains slow, while the number of hospitalizations and deaths per day is advancing rapidly, leading states and municipalities to adopt measures to restrict the movement of people," said survey manager Viviane Seda Bittencourt.

"Consumers look at the deteriorating economic situation and see serious risks to their employment and income, and are also affected psychologically by the fear of contracting the disease and the need to socially isolate," Bittencourt added.

Barring the all-time lows of April and May last year, consumer confidence in March was the lowest since 2015, when Brazil was a year into a steep two-year economic downturn.

© Reuters. FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in Rio de Janeiro

The fall in confidence was spread across most income brackets, but especially the lowest earners, FGV said.

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