A Recessionary Mindset Lingers in Latin America

A Recessionary Mindset Lingers in Latin America

Consumer confidence in the Latin America region declined for the second consecutive quarter to an index score of 90 in the second quarter, fueled by falling index scores in six of the seven countries measured, according to findings from Nielsen’s Global Survey of Consumer Confidence and Spending Intentions. Colombia was the only country that reported an increase from the first quarter, as confidence there climbed two points to 95. Confidence in Brazil (100), Chile (92) and Venezuela (72) declined six points each; confidence in Peru (98) and Argentina (68) dropped three points each; and confidence in Mexico (85) fell one point.

“In Brazil, while household income continues to grow and the unemployment rate remains low, inflation for food and beverages and high credit interest rates continue,” said Eduardo Ragasol, country manager, Nielsen Brazil. “There was a sense of good will and pride associated with hosting the FIFA World Cup, but the country is also in the midst of a presidential campaign, and consumers are cautious about the future.”

Regionally, the outlook for job prospects declined in all seven countries in Latin America, with job prospect sentiment dropping 10 percentage points in Chile, 7 points in Brazil and 6 points in Argentina. The percentage of those who felt mired in recession increased from 62 percent in the first quarter to 67 percent in the latest period. Cash-strapped Latin Americans also reined in spending intentions across all categories measured in the second quarter.

A Recessionary Mindset Picks Up Pace in Brazil

A closer look at consumer perceptions in Brazil reveals a deeper story that goes beyond the country’s index score of 100. While the confidence level is at the optimistic baseline and 70 percent of respondents feel confident about their personal finances, 78 percent say they changed their spending behavior to save more money—a 6 percent increase in saving sentiment from the previous quarter, and the highest score recorded by Nielsen’s survey, to date.

At the root of these spending and saving patterns, is a recessionary mindset. While just 32 percent of Brazilian respondents felt that their country was in a recession in the fourth quarter of 2012, that number has steadily increased–peaking at 63 percent this latest quarter.

Analyzing nine years of historical consumer confidence data by region, country and time period can now be accomplished with the click of the mouse. Use the Global Consumer Confidence Trend Tracker to explore consumer confidence in Brazil and other countries dating back to 2005.

For more detail and insight, download Nielsen’s Global Survey of Consumer Confidence and Spending Intentions.

About the Nielsen Global Survey

The findings in this survey are based on respondents with online access across 60 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective only on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of that country. Additionally, survey responses are based on claimed behavior, rather than actual metered data.