Brazilians’ consumption intention in 2021 is the lowest in history, points out CNC

The consumption intention of Brazilian families has never been so low. This is shown in the survey by the National Confederation of Commerce of Goods, Services and Tourism (CNC) released this Wednesday (4), and advanced exclusively by CNN.

Pressured by inflation, high interest rates and political uncertainty, the indicator reached 71.6 points in 2021, with a drop of 9.9% compared to 2020. The maximum value for the index is 200 points.

“We had a drop in the consumption power of families because the income from work has hardly increased. On the other hand, the cost of living due to the rise in the price of fuel, energy and food has risen considerably”, said the economist at the Getúlio Vargas Foundation (FGV), Renan Pieri, to CNN.

The last negative record of the index was in 2016, the year in which the impeachment of Dilma Rousseff caused political instability in the country, according to the research. The consumption intention of Brazilian families had a better performance in 2012, when 136.4 points were registered.

In addition to inflation and high interest rates, the fragility of the labor market and the reduction in income also appear as a highlight for the drop in consumption intentions last year. About 40.6% of Brazilians claim that their income was lower in 2021, when compared to previous years, according to the CNC survey.

Already 31.5% indicate that the job market is ‘less secure’. “We have had an inflationary acceleration in Brazil again. And people usually end up noticing it in their pockets. Products become more expensive, it is a harmful effect on the economy of any country. These high values ​​harm people and companies, who need to buy more and more expensive products to continue producing. Everything is interconnected as it is factories and industries that hire people and make the economy go round. And with inflation, it becomes much more difficult”, said the Coordinator of the MBA in Financial Management at FGV, Ricardo Teixeira.

In the assessment by income group, the poorest families registered the lowest consumption intention in Brazil. The population that earns up to 10 minimum wages revealed an intention to consume 68.4 points in 2021.

On the other hand, people who earn more than 10 minimum wages also had a drop in intention, however, not so pronounced, registering 86.9 points.

By regional criteria, the population of the North showed the biggest drop in the annual average, with a drop of 26% in the intention to consume in 2021, compared to the previous year.

The Northeast, Midwest and Southeast had a drop of approximately 10%. According to the survey, people from the South region were the ones who most considered consuming last year, with 79.1 points.