Brazil: Consumer and industrial sentiment lose ground in February
Latest reading: The seasonally adjusted consumer confidence index published by the Getulio Vargas Foundation (Fundação Getúlio Vargas) retreated for a third consecutive month in February, falling to 83.6. February’s result was below January’s 86.2 and marked the weakest sentiment since August 2022. As a result, the index moved further below the 100-point threshold, indicating starker pessimism among Brazilian consumers.
Similarly, the seasonally adjusted industrial business confidence index inched down to 98.3 in February, below January’s 98.4. February’s result was the worst since May 2024. As such, the index moved further below the 100-point threshold, signaling pessimism among industrial firms.
Outlook: Taken together, data for both consumer and industrial sentiment averaged below Q4 in January–February and deeper in pessimistic territory, spelling trouble in Q1 for private consumption and fixed investment, respectively.
Elevated interest rates, prospects of additional rate increases and rising inflation will likely hold sentiment hostage in pessimistic territory in the coming months.