May 23, 2019 / 11:57 AM / 3 months ago

UPDATE 1-Brazil consumer confidence falls in May for fourth straight month

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BRASILIA, May 23 (Reuters) - Consumer confidence in Brazil fell for a fourth month in May to its lowest since October last year, think tank Fundação Getúlio Vargas said on Thursday, suggesting the economy’s weakness in the first quarter had spilled over into the second.

FGV’s consumer confidence index fell to 86.6 in May from 89.5 in April, marking the first time since 2015, when Brazil was in the midst of one of its worst recessions in history, that it has declined four months in a row.

“Between February and April, the fall in confidence had been more associated with the pace of economic recovery and its impact on employment and people’s financial situation,” said Viviane Seda Bittencourt, survey coordinator at FGV.

“May’s result shows a significant increase in consumer dissatisfaction with the current situation, especially among lower income families. This might change if political and economic uncertainty across the country is reduced,” she said.

Uncertainty surrounding the government’s pension reform proposals currently going through Congress, seen as key to fixing the public finances and reviving growth, has been blamed for Brazil’s economic woes this year.

The government on Wednesday cut its 2019 growth forecast to 1.6% from 2.2%, and even that is still higher than analysts’ consensus expectation for around 1.2%.

According to FGV, consumers’ outlook for the economy continued to deteriorate in May, while its index measuring satisfaction with household finances fell to “extremely low levels in historical terms.” (Reporting by Jamie McGeever Editing by Bernadette Baum)

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