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Balancing Act: Exploring Brazilian Consumers' Dual Mindset in 2024

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Justinas Liuima Bio
Anjali Jain Profile Picture
Anjali Jain Bio

Easing of inflationary pressures and looser monetary policy are expected to benefit Brazilian consumers and lift their purchasing power, although slower global economic growth will constrain faster disposable income growth in 2024. For companies, it will be key to provide good value for money for goods and services to gain customer loyalty in Brazil.

Inflationary pressures ease but consumer income growth to remain modest

Inflationary pressures in Brazil are easing with the inflation rate projected to reach 4.1% in 2024

Source: Euromonitor International

Lower global commodity prices, stabilising prices of manufactured goods and appreciation of the Brazilian real are set to help limit price growth in Brazil. Nevertheless, core inflation (excluding food and energy price fluctuations) remains higher due to strong demand for services.Inflation in Brazil

In line with easing inflationary pressures, Brazil’s central bank is starting to ease its monetary policy. For example, Brazil’s central bank cut the base interest rate by another 50 basis points in September 2023 to 12.75% and indicated potential further cuts if inflationary expectations remain subdued. Lower interest rates are expected to benefit Brazilian consumers and stimulate demand for big-ticket items.

However, slower global economic growth will constrain faster disposable income and spending growth in 2024. Brazil is one of the world’s largest commodity exporters and slower economic growth in China is expected to slow exports and wage growth in 2024. As a result, per capita disposable income in Brazil is forecast to grow by a moderate 0.6% in real terms in 2024. Consumer expenditure in Brazil is predicted to expand by 0.5% in real terms in 2024, indicating consumer willingness to save more and prevailing cost sensitivity.

Exploring the dual mindset of Brazilian consumers

In 2024, with the easing of inflationary pressures in Brazil, consumers are expected to cautiously loosen their purse strings

Source: Euromonitor International 

While a significant portion of their spending will still go towards essential products, there's a noticeable uptick in expenditures for catering, transportation services and education.Consumer expenditure in Brazil

This shift reflects a dual mindset among Brazilian consumers. On the one hand, they are spending on transportation and catering, demonstrating a desire to live in the present and create memorable moments. Simultaneously, they are forward-thinking and invest in health goods and medical services and education to secure a better future. This is exemplified by the 61% of Brazilian respondents in Euromonitor International's Voice of the Consumer: Lifestyles Survey 2023 who express their intention to save more money in the coming year.

Brazilian consumers want to enjoy life and make the most of their budget

Source: Euromonitor International

For businesses, the key is to connect with consumers by providing affordability and delivering real value. By doing so, companies can not only meet immediate needs but also cultivate a more extensive and loyal customer base for the long term. It’s an opportunity to align with the evolving consumer landscape in Brazil.

Further insights into the cost-of-living crisis are available in our infographic, A Look at the Cost of Living Around the World and our report Understanding the Cost-of-Living Crisis: Raising Prices Is Not an Effective Strategy.

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