Brazil: Consumer sentiment retreats in December; industrial sentiment improves
Latest reading: The seasonally adjusted consumer confidence index published by the Getulio Vargas Foundation (Fundação Getúlio Vargas) retreated to a six-month low of 92.0 in December from November’s over one-decade high of 95.6. As a result, the index moved further below the 100-point threshold, indicating starker pessimism among Brazilian consumers.
Conversely, the seasonally adjusted industrial business confidence index rose to 99.6 in December from the prior month’s 98.6. As such, the index moved closer to, but remained below, the 100-point threshold, signaling marginal pessimism among industrial firms.
Outlook: Taken together, consumer sentiment averaged slightly above Q3 in Q4. The opposite was true of industrial business sentiment, which was likely dampened by continued interest rate hikes from the Central Bank. Overall, both readings averaged in pessimistic territory in Q4, suggesting investment in the industrial sector, as well as private consumption, remained relatively muted. In line with this, our Consensus is for annual growth of private spending to have dipped to a one-year low in Q4, and for that of fixed investment to have moderated from Q3.