RIO DE JANEIRO, Brazil, June 30 (Reuters) - Consumer confidence in the city of São Paulo, Brazil’s business hub, dropped in June to its lowest level since October 2003, another sign of economic trouble ahead of President Dilma Rousseff’s re-election bid in October.
São Paulo’s trade federation FecomercioSP on Monday said its index of consumer confidence dropped to 107.4 points, nearing the 100-point level on the index that separates pessimism from optimism.
With stubborn inflation, smaller wage increases and higher interest rates eroding purchasing power, consumers in Latin America’s biggest economy are more downbeat.
The index fell 1.9 percent from the previous month and 26 percent from a year ago. It was the fourth consecutive monthly drop for the indicator, which polls about 2,200 consumers in the city of São Paulo.
The adverse economic scenario “has been putting the brakes on favorable perspectives for the future,” the federation said in a statement. (Reporting by Aluísio Alves, writing by Walter Brandimarte; Editing by David Gregorio)