Brazil's consumer confidence edged down in May, with a clear drag from the expectations component

Overview

This report tracks the May performance of Brazil's FGV consumer confidence index. The core conclusion is that consumer confidence posted a slight pullback after a cumulative recovery from March to April, with the headline index falling 0.3 points in May to 88.8, mainly dragged down by the expectations component. Although the current conditions component improved, it remained in a weak and pessimistic range.

Core views

Goldman Sachs believes that the weakening in consumer confidence in May was not a major reversal, but rather a modest offset to the cumulative 3.0-point gain from March to April. Structurally, the expectations component fell back to 91.3 from earlier levels and was the main factor dragging down the headline index; the current conditions component rose to 86.1, but this was still insufficient to change the overall pessimistic assessment.

Analysis framework

The report uses a macro high-frequency indicator tracking approach, comparing the monthly changes in the headline FGV consumer confidence index and its two subcomponents—current conditions and expectations—and benchmarking the current reading against the end-2025 level and the cumulative increase from March to April to assess whether the recovery in consumer sentiment is continuing.

Methodology notes

• Macro Indicator TrackingFGV Consumer Confidence Index

  Observe changes in Brazilian consumer sentiment through the headline index, the current conditions component, and the expectations component.

  This method decomposes monthly changes in the headline index into current conditions and expectations, helping identify whether short-term confidence changes stem from improving current perceptions or weakening future expectations.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Brazil macro and consumption-related assets

  Consumer confidence is an important indicator for observing consumer demand and macro sentiment.

  Strengths

  The current conditions component rose 0.8 points in May, and it had previously posted a cumulative 3.0-point increase from March to April.

  Weaknesses

  The headline index declined in May, and the expectations component fell and remained below its December 2025 reading.

  Comparison

  The 0.3-point decline in May was smaller than the cumulative 3.0-point increase from March to April, but the overall index still remained slightly below the end-2025 level.

  Risks

  If the expectations component continues to weaken, it could put pressure on consumption recovery and risk appetite.

Key data

• FGV Consumer Confidence Index88.8Down 0.3 points in May, partially offsetting the cumulative 3.0-point rise from March to April.
• Cumulative increase from March to April+3.0 pointsThe magnitude of the May decline was relatively small compared with the rebound in the previous two months.
• Current Conditions Component86.1Up 0.8 points in May, but still weak and in pessimistic territory.
• Expectations Component91.3Down 1.0 point in May, below the 93.8 level in December 2025.
• Relative to end-2025 levelSlightly below end-2025Consumer confidence is currently slightly below the end-2025 reading.

Impact & implications

This data implies that the recovery momentum in Brazilian consumer confidence slowed in May, with the weakening in future expectations particularly worth watching. If the expectations component continues to decline, it could undermine the sustainability of subsequent improvements in consumer sentiment; however, the monthly improvement in the current conditions component also suggests that current conditions have not deteriorated in tandem.

Risks

• A continued decline in the expectations component could suppress the recovery in consumer confidence.
• Both the current conditions and expectations components remain in pessimistic territory, indicating that the sentiment foundation is still not solid.
• The report contains limited data and mainly reflects changes in a single monthly indicator, so it cannot by itself infer the full consumption trend.

What to watch

• Whether the FGV consumer confidence index resumes rising in subsequent periods.
• Whether the expectations component can stabilize and move back close to or above the 93.8 level in December 2025.
• Whether the current conditions component continues to improve and exits the weak range.
• Whether consumer confidence rises back above the end-2025 level.