Elites and lower-middle class set to lose purchasing power in Covid-19 pandemic

purchasing power

Estimates of the economic impacts of the Covid-19 pandemic show that socio-economic classes A and C1 — economic elites and the lower-middle class — will be hit the hardest by the financial effects of social isolation. On the other hand, low-income informal workers are set to increase their monthly earnings thanks to emergency aid. A survey by consultancy IPC Marketing, published by news website G1, showed that 13.1 million families with an average monthly income of BRL 3,085 are set to lose 11 percent of their purchasing power, an overall drop of BRL 105 billion. Also, according to the consultancy, class A families — earning an average of BRL 25,554 a month — should lose 7 percent of consumption potential, mainly due to the drop in variable income investments made by these families.

In between the two hardest-hit groups, families from Class B are expected to have their finances remain relatively stable. While the top end of the group will see a drop off in income, the majority are not projected to see significant losses in purchasing power. Going further down the socio-economic ladder, the 13.1 million families that receive the Bolsa Família cash transfer benefit will see a temporary increase in earnings, according to the consultancy firm Tendências.