The improvement in the family budget should take at least six months to have an impact. The forecast is that the resumption of consumption and old financial habits will be slow and delayed until July 2019 even though 73% Brazilians have cut back on expenses.
According to the Alelo’s Brazilian Financial Habits Survey, out of those employed who reduced their expenses, 62% chose to consume cheaper brands and 61% started to go out to eat less often.
“The economic scenario in recent years has left the worker more apprehensive about spending money. If 38% of workers used to go grocery shopping every week, nowadays this number dropped to 8% for instance. “It is an attempt to avoid the famous impulse purchases”, says Alelo’s director of marketing and products, André Turquetto.
The survey also shows that 48% of interviewees said they stopped traveling, while 27% replaced branded drugs with generic drugs and 10% even canceled their health insurance. According Flávio Calife, an economist at Boa Vista Serviço Central de Proteção ao Crédito (SCPC Boa Vista), a Credit Protection Service, “the household budget is still tight, not so much due to indebtedness, but because income has decreased as a result of high unemployment rates in the country.”
According to Flávio Borges, Superintendent of Finance at the Serviço de Proteção ao Crédito (SPC Brasil), even if the electoral result leads to greater confidence among businessmen and consumers, the recovery of income will still “take a few quarters to make an impact.”“First, businessmen need to make the decision to employ again in order to trigger the consumption and increase the revenue of companies. This should not be reflected in the household budget for at least six months,” says the expert.
However even if the recovery of revenue is boosted, the return of the old consumption habits might not happen until there is greater certainty about the Brazilian macroeconomic environment. “The stability of having a new government might influence for the better, but the improvement comes slowly, mainly because people are still suffering the effects of the financial crisis,” says Calife.