Panel SA: Inflation and loss of income deplete reserves accumulated in the pandemic

High inflation and loss of income are depleting the reserves accumulated by Brazilians in the most critical phase of the coronavirus pandemic, when the payment of emergency aid to the poorest and the reduction in consumption led to a significant increase in savings rates.

Recent statistics show a sharp drop in savings flows and suggest a strong correlation between the movement and the decline in workers’ income in recent months, economists say.

Calculations by Professor Carlos Antonio Rocca, from Cemec-Fipe, point to a negative flow of R$ 13.8 billion in household financial savings in September, in a broad measure that includes deposits in savings accounts, investments in shares and other financial applications.

The drop was greater in savings accounts with balances below R$5,000. Only passbooks with balances above R$ 50 thousand registered a positive flow, according to data from the Credit Guarantee Fund compiled by Rocca.

Estimates from the last Inflation Report, published by the Central Bank on Friday (17), indicate a 7.6% loss of income this year through September, discounted for inflation. The account includes salaries, pensions, social benefits and other income.

With Ricardo Balthazar (interim), Andressa Motter e Ana Paula White​.