Covid-19 plummets confidence levels in São Paulo

confidence levels down

The consumer confidence of families in the city of São Paulo dropped 10.1 percent in April in comparison to last month, according to commerce and services association Fecomercio. The plunge in consumer sentiment is directly related to the Covid-19 crisis, says Fecomercio, as both the index of current economic conditions (ICEA) and consumer expectations index (IEC) registered steep devaluations of 12.1 percent and 9.1 percent versus March levels. 

Default ratio

According to the research, 63.7 percent of São Paulo’s families are in debt, while 21.6 percent — 852,538 homes — are defaulting on these debts. In Fecomercio’s view, these numbers are not set to skyrocket, as banks are limiting loans and, in turn, 87.5 percent of consumers said they don’t plan to take out new loans in the coming three months. 

The data points to a concerning aspect of the federal government’s plan of sustaining the Brazilian economy by way of the private sector — whether by stimulating credit for companies or granting citizens a minimum income for consumption.