Brazilian Consumer’s Confidence Drops 2%

Brazil’s Consumer Confidence Index, calculated each month by the Getúlio Vargas Foundation (FGV), fell 2.1% in February in relation to January of this year.

According to the coordinator of the survey, Aloí­sio Campelo, the decline is in part a reflection of seasonal factors operating at the end of the year.

"Confidence is higher in January, because the population is caught up in the year-end atmosphere of optimism. Vacations, what is left over from the year-end bonus, all of this ends up having an influence."

In his view, Brazilian consumers are starting to recover confidence in the economy. He referred to the increase in the index since last November after a succession of declines that began in May, 2005.

"Despite the drop, the index is still higher than it was in December. Beginning in May, the high level of confidence that existed during the passage from 2004 to 2005 deteriorated, in consequence of a series of factors, such as the country’s political crisis and high interest rates," Campelo observed.

In Campelo’s opinion, the recovery of confidence is proceeding in a "timid" manner. The Survey of Consumer Expectations is based on a sample of 2,000 homes in seven Brazilian capitals. The questionnaire contains around 20 items about expectations with regard to economic impacts.

ABr

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