Two straight quarters of GDP (Gross Domestic Product) stagnation in 2021, the prospect of a meager Christmas, more stagnation next year and increased uncertainty in the external scenario, with a new wave of the pandemic — the challenging economic scenario is already reversing the expectations of consumers and companies.
“We expect more of the same in 2022, with forecast figures for next year’s GDP close to zero. It will be another year of stagnation, with all the uncertainties that the elections bring, and a lot of uncertainty abroad,” he says. economist Paulo Picchetti, from FGV (Fundação Getulio Vargas).
The IBGE (Brazilian Institute of Geography and Statistics) announced on Thursday (2) that the GDP fell 0.1% in the third quarter. Even when looking in the rearview mirror, the numbers confirm, according to Picchetti, an impression that the economy is sideways after a brief period of recovery.
“The various detailed GDP results show that no force is capable of causing growth to accelerate. If vaccination allows services to recover, there is a negative force coming from more uncertainty, with the new variant, and from an economic policy of raising interest rates to fight inflation.”
Looking to the future, surveys point to a loss of confidence in industry, consumers, civil construction and commerce.
Business confidence dropped 3.3 points in November, following a downward trend outlined in September, according to confidence and uncertainty indicators from the Ibre (Brazilian Economic Institute), also from the FGV.
Consumer confidence dropped 1.4 points in the month, to 74.9 points, the lowest level since April 2021.
In the case of the consumer, the period captured by the survey is for the next six months. For companies, the confidence indices consider horizons of three and six months.
Almost all confidence indices are below 100 points and on a downward trend since September. They were growing up after the second wave, they were on a recovery.
In September, they had already shown signs of worsening and have now confirmed the trend, says Aloisio Campelo Júnior, superintendent of Public Statistics at Ibre.
“The scenario is one of economic slowdown, and expectations reflect this deterioration. Unlike the first months of the year, when the second wave of the pandemic caused the economy to sink, now it is inflation and monetary tightening that weigh on expectations.”
From the businessmen’s point of view, the fiscal scenario is not favorable and the increase in interest affects credit taking. In the case of the consumer, the main influence is inflation.
Confidence among low-income consumers, the main ones affected by rising prices, was close to the lowest recorded by the survey in 16 years. In November, the average level of confidence among lower-income consumers dropped 3.6 points to 64.7.
While the confidence of those with the highest income was stable, at 83.8 points. As a result, the distance between the two extreme income groups is the largest in the historical series started in 2005, at 19.1 points.
Companies and consumers see a horizon of contracted stagnation for 2022, says Campelo.
“It’s the continuation of a deceleration trend. If we look at the disaggregated GDP, the services sector grew a little and there was a big drop in agriculture, but it’s not much.”
When looking at the economic scenario abroad, Picchetti assesses that the omicron variant changed the perspectives in the last week. Growth was already slowing down, distribution chains continued to be hampered by the lack of components and there is an expectation of a drop in commodity prices.
“Now, we still have this new wave with the new variant and some countries that are already in lockdown and discussing new restriction measures. It is not a scenario that allows us to say whether help from the external sector will come to the Brazilian economy.”
Picchetti also assesses that, given the more complex scenario for next year, the ideal would be for the government to work on reducing uncertainties.
“Unfortunately, we see that the external uncertainties are added to the fiscal framework, the maneuvers made to increase expenditures without matching revenues. And the price of this was already appearing in terms of a devalued currency, an increase in the perspective of future interest rates.”
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