Brazil consumer confidence falls for first time in six months as COVID-19 fears persist

BY Reuters | ECONOMIC | 10/23/20 07:38 AM EDT

By Jamie McGeever

BRASILIA, Oct 23 (Reuters) - Consumer confidence in Brazil fell in October for the first time in six months, a survey indicated on Friday, with persistent worries over the COVID-19 pandemic weighing heavily and suggesting that the economy's recovery may be losing steam.

The Getulio Vargas Foundation's (FGV) consumer confidence index fell one point to 82.4 points in October, snapping a run of five monthly increases from April's record low 58.2, and slipping further back from the pre-pandemic level of 87.8 in February.

Confidence about future expectations fell more sharply than sentiment about the current situation, and confidence across all income brackets fell, particularly among those at the lower end of the scale, FGV said.

"There is still a lot of uncertainty regarding the pandemic and the pace of economic recovery, with the (government's) employment and income maintenance programs ending soon," said survey manager Viviane Seda Bittencourt.

"Consumer confidence also continues to be affected by COVID-19 fears, which is making people very cautious and which is likely to persist until the health crisis is resolved," she said.

Emergency payments to supplement lost income during the coronavirus pandemic have provided a lifeline to up to 30 million of Brazil's poorest families. These payments are scheduled to expire at the end of the year.

The economic expectations sub-index fell two points to 110.6, the biggest driver of the overall decline, FGV said.

Brazil's economy has recovered from the depths of the pandemic crisis, led by retail sales, manufacturing and industry. The government will revise its 2020 forecast of a 4.7% decline in gross domestic product early next month.

Many economists had penciled in a crash of 7% or more earlier this year.

(Reporting by Jamie McGeever; editing by John Stonestreet and Chizu Nomiyama)

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