Brazil Pulse - Consumer’s Confidence Has Reached the Lowest Level - April 2016

With the impeachment process in progress, the country is in the standby pace. What to expect in the coming months?

April witnessed the unfolding of another impeachment process in the young Brazilian democracy.

On April 17 the House of Representatives approved the continuity of President Dilma Rousseff’s impeachment process in Congress. There were 367 votes in favor and 137 against, plus another 7 abstentions and 2 absences. Now, the request for the President’s step down is following on in the Senate that is analyzing it.

If a simple majority of Senators - 41 votes - accepts the process that was initiated in the House of Representatives, the President is required to step down from Office for a period of up to 180 days, until when the trial should take place. Dilma Rousseff continues stating  she won't resign. The chance to call for new elections also seems to have tapered off.

In this context, Pulso Brasil’s political indicators were as follows: in March, 81% of respondents regarded Dilma Rousseff’s administration as bad or very bad. This index dropped to 76% in April. The direction in which the country is heading was considered wrong for 94% of the people in March; in the April wave, this index was at 93%.

The support for impeachment - that in March was 61%  - was 59% in April. This variation is within the survey’s margin of error. The data of Pulso Brasil has shown that the higher the socio-economic level is, the greater is the support for the impeachment. In classes D and E, 43% support it and 33% do not.

It is also in these social classes that less criticism is found when evaluating the country and Dilma Rousseff’s administration in comparison to classes A, B and C. This phenomenon is also observed in the North and Northeast - if compared to other regions of the country. These indicators partly explain the reason why the support for the impeachment has consolidated at the 60% level over the last few months. Pulso Brasil’s full report includes more detailed analyses about this phenomenon.

The Brazilian’s agenda: fighting corruption and the  concerns about the economy

The fight against corruption has increasingly taken up space in the agenda of Brazilians, but the economic and social problems are what most torment the population.

Unemployment is seen by 27% of the respondents as the number 1 problem to be solved. Crimes and violence, with 16% of mentions, poor quality of medical care, with 13% and corruption/embezzlement with 9% of the mentions comes next. The anti-corruption agenda is more present in the concerns of AB classes, while problems related to violence appear with higher incidence in classes D and E.

Considering the 10 years of monitoring the Brazilian social indicators, once again we are investigating the public opinion’s perception about the management of financial resources. Just like in 2005, Brazilians – in their vast majority - believe that social problems, such as health, education and public safety, do not need more financial resources but better use of those existing.

In addition, the mismanagement of the public sector is increasingly latent and present in the daily lives of Brazilians. Not only because of the current institutional crisis, which is severally hitting the federal Government, but also due to the financial crisis that affects a number of States and municipalities, by delaying the salary of civil servants - worsening essential services (which have always been very poorly evaluated in Brazil) - and by the increasingly evident disregard for social issues and welfare of citizens - the corruption scandals expose the correlation between administrative impropriety and poor quality of life.

Pulso Brasil’s full report includes more detailed analyses about a number of other issues on the agenda of Brazilians, such as inflation, taxes, structural reforms, among other relevant topics.

Consumer confidence has never been so low

Ipsos/ACSP consumer confidence index, monitored since 2005, has reached its lowest level in history, and is at 64 points - vis-à-vis the 73 points recorded in March. The Southeast region presents the lowest index, at 53 points. According to the IBGE's PME (Portuguese version for Monthly Employment Research) data, this is the region that has been the most affected by unemployment. The South Region, which also has suffered strong economic slowdown, presented 59 points in the index.

We live in an environment of political and economic instability, which has ended up in a dramatic crisis of confidence: be it with consumption, be it with institutions. There are two aggravating circumstance in this situation: Brazilians live a huge insecurity regarding employment, which consequently creates more distrust regarding the future. As a result, the consumption and the economy have sunk into the  negative spiral of recession.

Political Barometer

To react to the crisis, a number of measures should be taken by the Temer administration (be it temporary or effective). To adopt these measures, the President-in-Office will have to rely on the support of the population, the market and the Congress.

Pulso Brasil has been monitoring the endorsement of public opinion regarding the necessary reforms in Brazil, as well as the support to major political personalities in the country. This analysis allows us to understand the degree of governability that the next administration will have when facing the challenges that the Brazilian situation will impose, as well as picture scenarios for the medium and long term. This detailed analysis is contained in the full report of Pulso Brasil ([email protected]).