Survey shows that inflation changes behavior of Brazilians

With a tight budget, one in four people in Brazil cannot pay all their bills at the end of the month, a survey carried out by the National Confederation of Industry (CNI), in partnership with FSB Research Institute reads. It shows a reduction in spending on leisure, clothing and travel.

According to the survey, balancing one´s personal financial situation is getting harder and harder. This is because only 29 percent of Brazilians manage to save, while 68 percent cannot save money at all. Despite this, 56 percent of respondents believe that their personal economic situation will be a little or much better by December.

The survey also showed that 64 percent of Brazilians have cut spending since the beginning of the year, and 20 percent have taken out a loan or taken on debt in the last 12 months. Regarding specific situations, 34 percent of respondents were late paying their electricity or water bills, 19 percent failed to pay their health insurance, and 16 percent had to sell an asset to pay off debts.

Other habits have been affected by inflation. According to the survey, 45 percent of Brazilians stopped eating out, 43 percent reduced spending on public transport, and 40 percent stopped buying some kinds of food.

Among those who reduced consumption, 61 percent believe that personal finances will improve in the coming months. The optimism, however, will not be reflected in higher consumption. Only 14 percent of the population intend to increase spending by the end of the year.

Bargain

Among the items that most affected the pockets of respondents in the last six months, cooking gas leads among 68 percent of respondents. Then come rice and beans (64%), electricity bills (62%), red meat (61%), and fruits and vegetables (59%). Fuels appear in sixth place, with 57 percent. In the case of food, the perception of high prices for items such as rice, beans and red meat increased by more than 10 percentage points in relation to the previous survey, in April.

With the rise in prices, the population is resorting to an old habit: haggling. 68 percent of respondents admitted to having tried to negotiate a lower price before making any purchases this year. A total of 51 percent paid in installments to credit card purchases, and 31 percent admitted to “buying on the cuff”. High-interest rates are making credit less attractive. Less than 15 percent of Brazilians resorted to overdraft, consigned payroll loans or loans from private people, the survey reads.

CNI Head Robson Andrade said the effects of the COVID-19 pandemic and the war in Ukraine have compromised the country's economic recovery. The acceleration of inflation has led to high-interest rates, which has discouraged consumption and investments. On the other hand, unemployment is falling, and the average income of the population is gradually recovering, which gives encouragement for the coming months, Andrade says.

The survey, commissioned by CNI to Instituto FSB Research Institute, is the second carried out in the year focusing on the economic situation and consumption habits in Brazil. 2,008 citizens were interviewed in person, in all Brazilian states, between July 23 and 26.