February 20, 2022

10:02

Malu Dacio and Priscilla Peixoto- Cenarium Magazine

MANAUS (AM) – Going against the Brazilian national average, the North region was the only one to register a monthly drop in the indicator of Intended Household Consumption (ICF) in the month of February, with -1.2%, also the lowest indicator, with 58.3 points. The information is from the National Confederation of Trade of Goods, Services and Tourism (CNC), which published the data on Friday, February 18.

According to the Confederation, in the rest of the country, the ICF indicator rose 0.4% and reached 77.6 points in February. The figure reached the highest level since May 2020, when the value reached 81.7 points. The Confederation figures also point out that the indicator is below the 100-point satisfaction level since April 2015, when it stood at 102.9 points.

Apparent factors

In the analysis of economic consultant Mourão Júnior the increase in consumption intention, except in the North region, is due, among other factors, to the vaccination against Covid-19 and the “apparent control” in the economic sphere, damaged by the pandemic, generating the perspective of a retracted demand.

“We are coming from a pandemic period and a new strain that despite the economic data of an inflation rate of 10.78 and a Selic rate of 10.35, the aspect of concern last year was of ‘foot on the brake’, but what was noticed at the beginning of this year is that the vaccination had an effect and the impact on the economy, due to Covid-19, was manageable. This generated a retracted demand, making the consumers already visualize this aspect of purchase and consumption”, explained Mourão.

Indicators and Regions

By income bracket, families earning more than ten minimum wages indicated a level of dissatisfaction of 94.5 points, a drop of -0.6% in the month and an increase of 10.5% year-on-year. The indicator for families earning less than ten minimum wages rose 0.7% to 74.0 points. In the year-on-year comparison, there was an increase of 2.9%.

Among the regions, the North had the only monthly drop in February, with -1.2%, also presenting the lowest indicator, with 58.3 points. The highest increase occurred in the South, with 1.9%, where families are more confident, with 87.7 points.

North in decline

For the economic consultant, it is necessary to consider two existing issues for the negative result in the North region. The first is the economic factor and the second is the issue of the new strain, worrying more intensely and giving a “hold on consumption” of the inhabitants of Manaus, one of the cities that starred scenes of chaos and collapse in health.

“We have to emphasize two variants in the face of this, the first is the economic issue driven by the Manaus Free Trade Zone model. It, generally, in the first quarter of the year, behaves negatively, because we manufacture products and depend on the domestic market and a whole perspective of employment and income generation generated in the last quarter of the previous year; in the beginning of the following year it becomes more negative, contracts are terminated, economic activity decreases and consumption perspectives also reduce”, highlights the specialist.

On the second point, Mourão points out: “The issue of the new strain and Manaus being in the spotlight, during the pandemic’s peak, also contributes to this result. We have experienced several economic damages in our state, which makes the consumer stop shopping, worrying about how the region will be because of the pandemic,” he analyzes.

Impacts

According to the consultant, the impacts generated in the consumption intentions are clear. He affirms that the increase in demand and, consequently, an offer that cannot supply, makes the so-called demand retracted, causing increases in inflation and even pressure towards the devaluation of the Real.

“Consequently, the economic aspect may not be very favorable to this sudden increase in demand. The Central Bank itself has been visualizing a rise in the Selic rate, which is already at 10.75”, concludes the professional.