Table of Contents
Executive Summary
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- After the basic, there is not a lot left to half of Brazilians
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- Figure 1: Financial situation, February 2016
- Brazilians are planning purchases more
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- Figure 2: Lifestyle changes, February 2016
- Eating out, technology, and alcoholic drinks: the first to be cut, when times are tough
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- Figure 3: Spending cuts, February 2016
- Internet rises as a tool to search for deals
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- Figure 4: Interest in thrift, February 2016
- What we think
Brazil Today – What You Need to Know
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- Economic
- Inflation skyrocketed in 2015
- Jobs continue to suffer major cuts
- Brazilians are aging…
- …and having fewer babies
- The rise of alternative families
The Economy
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- Brazilian economy dives deeper into recession
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- Figure 5: Change in GDP, Brazil, 2010-15
- After reaching a peak, inflation is slowing down
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- Figure 6: Consumer price index (IPCA), annual change, 2002-15
- Figure 7: Consumer price index (IPCA), monthly change, April15-April 2016
- Layoffs intensify as the recession progresses
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- Figure 8: Unemployment rate in moving quarters, Brazil, December 2014-March 2016
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- Figure 9: Creation of job positions in thousands by month, Brazil, March 2015-March 2016
- Personal savings declining
- High interest rates continue to limit consumption and credit
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- Figure 10: Selic prime interest rate, annual %, 2012-16
- Consumer’s confidence reaches its lowest level
The People
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- Age structure
- Brazilians are living longer lives
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- Figure 11: Life expectancy at birth, by gender, brazil, 2000-14
- Fertility rate
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- Figure 12: Fertility rate, Brazil, 2000-15
- Figure 13: Birth rate (number of births per thousand habitants), Brazil, 2000-15
- Marital status
- More marriages and more diversity in marriages
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- Figure 14: Number of marriage records, Brazil, 2013-14
- Graduate degree is a privilege of only 13% of the population
Consumer Expenditure – What You Need to Know
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- High inflation drives consumer expenditure
- OTC and pharmaceuticals: Among the fastest growing markets in the next years
- Entertainment and vacations continue to suffer during recession
- Opportunities for healthy food in the in-home category
- Mixed non-alcoholic drinks could help revamp sales during the recession
- The need for convenience drive the household care market
- Income drop and tax rise affect the BPC market
- Higher US dollar can boost local production of clothes and accessories
Expenditure Overview
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- Sector breakout
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- Figure 15: Consumer expenditure, by sector (R$ billion), 2015
- Outlook for the next five years
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- Figure 16: Best- and worst-case forecast total value sales, 2010-20
- Winners in the next five years
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- Figure 17: Fastest-growing market sectors, at current prices, by % growth, 2015-20
- Slower-growing sectors in the next five years
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- Figure 18: Consumer sectors with weaker growth, at current prices, by % growth, 2015-20
In-home Food
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- What we think
- High inflation impacts home food consumption
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- Figure 19: In-home food market size, by value, Brazil, 2010-15
- Brazilians believe that cooking at home helps to save money
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- Figure 20: Best- and worst-case forecast for in-home food market, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Search for health benefits can sustain the consumption of premium foods at home
- Economic crisis presents opportunity for companies to offer more in-home food solutions
Eating Out
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- What we think
- Economic scenario may be affecting new investments in the sector
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- Figure 21: Food service market size, by value, Brazil, 2010-15
- Those exploring convenience can benefit even during the crisis
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- Figure 22: Best- and worst-case forecast for food service market, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Although it is decreasing, Brazilians keep eating out habit
- Convenience is still a strong motivator to eat out
Non-alcoholic Drinks
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- What we think
- Inflation and new taxation impact the category
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- Figure 23: Non-alcoholic drinks market size, by value, Brazil, 2010-15
- Mixed drinks offer opportunity for the growth of the category
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- Figure 24: Best- and worst-case forecast for non-alcoholic drinks market, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumption barriers need to be addressed by the category
Leisure and Entertainment
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- World Cup 2014 helped to organize cities to host more events
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- Figure 25: Leisure and entertainment market size, by value, Brazil, 2010-15
- Brazilians looking for low-cost leisure options
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- Figure 26: Best- and worst-case forecast for leisure and entertainment market, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Brazilians are spending more on leisure activities out-of-home
- Cooking at home can become a leisure activity between friends
Household Care
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- Domestic workers law can be changing the cleaning habits
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- Figure 27: Household care products market size, by value, Brazil, 2010-15
- Accumulating tasks, Brazilians can buy more efficient products
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- Figure 28: Best- and worst-case forecast for household care products market, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers are spending more with cleaning products
Alcoholic Drinks at Home and On-premise
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- What we think
- Alcoholic drinks at home
- Beer is the main cause of value growth
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- Figure 29: Brazilian alcoholic drinks at home expenditure, 2010-15
- Increased taxes on all alcoholic beverages will push value sales up
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- Figure 30: Best- and worst-case forecast for alcoholic drinks at home expenditure, at current prices, 2010-20
Alcoholic Drinks On-premise
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- High temperatures, Carnival, and the World Cup helped push sales in the on-premise sector
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- Figure 31: Brazilian alcoholic drinks on-premise expenditure, 2010-15
- Restaurants and bars should promote beverages’ qualities to push sales
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- Figure 32: Best- and worst-case forecast for alcoholic drinks on-premise expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers cut spending on alcoholic beverages in tough times
- Beer presents the highest consumption among alcoholic drinks
- Perceptions of premium products
Transport
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- What we think
- The transport market has seen robust growth
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- Figure 33: Brazilian transport expenditure, 2010-15
- Uncertainties in the economy are highly affecting the sales of new cars
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- Figure 34: Best- and worst-case forecast for transport expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Price and worries about the environment are key for the electric car sector
- Companies should help consumers alleviate traffic issues
Technology and Communications
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- What we think
- The technology and communications market has benefited from a tax break
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- Figure 35: Brazilian technology and communications expenditure, 2010-15
- Consumers are likely to take longer to exchange old products, slowing growth
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- Figure 36: Best- and worst-case forecast for technology and communications expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers have deprioritized spending on technology
- Use of instant messaging apps is popular among Brazilians
- E-commerce still needs improvement
Personal Finance and Housing
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- What we think
- Increased taxes and utility bills boosted growth
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- Figure 37: Brazilian personal finance and housing expenditure, 2010-15
- Higher interest rates will drive future growth
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- Figure 38: Best- and worst-case forecast for personal finance and housing expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers are getting savvier
- Rise in utility bills is one of the main reasons leading to changes in purchasing habits
- Consumers are relying more on credit cards
Beauty and Personal Care
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- What we think
- Strong market slowdown marks 2015
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- Figure 39: Retail sales of beauty and personal care products in Brazil, by value, 2010-15
- The market will keep growing in a moderate path
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- Figure 40: Best- and worst-case forecast for beauty and personal care, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Brazilians have been spending less with cosmetics since 2015
- ‘Do It Yourself’ can be a way out for consumers in times of crisis
OTC and Pharmaceuticals
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- What we think
- Increased pollution levels and aging population contribute to the retail sales of pharmaceutical products
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- Figure 41: Retail sales of OTC and prescription medicines in Brazil, by value, 2010-15
- Pharmaceutical industry can benefit from diseases such as swine flu
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- Figure 42: Best- and worst-case forecast for OTC and prescription medicines, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Elderly people contribute to the sales of prescription medicines
- Internet can be an option to buy cheaper medicines
Home and Garden
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- What we think
- Home appliances sector was one of the most affected by the recession
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- Figure 43: Retail sales of home and garden products in Brazil, by value, 2010-15
- Rising prices of steel can complicate sales of home and garden items
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- Figure 44: Best- and worst-case forecast for home and garden items, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Brands can do online promotions to avoid stagnation
- Sharing home appliances can be an opportunity for singles
Clothing and Accessories
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- What we think
- Clothing and accessories sector suffers with the crisis
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- Figure 45: Retail sales of clothing and accessories in Brazil, by value, 2010-15
- Brands must take advantage from a higher US dollar and the imports fall
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- Figure 46: Best- and worst-case forecast for clothing and accessories, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Brazilians are buying less clothing, accessories, and footwear
- Brands could target single consumers and do promotions
Vacations
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- What we think
- Economic instability makes consumers postpone travels
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- Figure 47: Retail sales of the vacations market in Brazil, by value, 2010-15
- Higher US dollar will keep affecting airlines in 2016
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- Figure 48: Best- and worst-case forecast for the vacations market, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Brazilians are trying to spend less with travels
- Family travel packages could boost tourism in Brazil
Miscellaneous Expenditure
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- What we think
- Spending on education and private health are reduced
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- Figure 49: Retail sales of the miscellaneous expenditure sector in Brazil, by value, 2010-15
- Unemployment will keep affecting the health sector
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- Figure 50: Best- and worst-case forecast for miscellaneous expenditure, at current prices, Brazil, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Lower income leads consumers to do more services by their own
- Distance learning encourages the Brazilian population
The Consumer – What You Need to Know
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- The recession is making the gender gap more evident
- Consumers over 55 are more likely to have a tight financial situation
- Cooking at home: an alternative for many to save
- Health and house cleaning products the least likely to be cut
- Reusable packaging is more appealing to young consumers
- The recession creates opportunities for private labels
Current Financial Situation
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- After the basics, there is not a lot left for half of Brazilians
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- Figure 51: Financial situation, February 2016
- North-East the least likely to be healthy, most likely to be tight
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- Figure 52: Financial situation, by region, February 2016
- Men have a better financial situation than women
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- Figure 53: Financial situation, by gender, February 2016
- Consumers over 55: the most likely to have a tight financial situation
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- Figure 54: Healthy and tight financial situation, by age group, February 2016
Lifestyle Changes
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- Brazilians are planning more of their purchases
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- Figure 55: Lifestyle changes, February 2016
- DIY: More common in the South and South-East
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- Figure 56: Agreement with the statement “I am doing more DIY (eg repairs) myself rather than hiring a professional (eg builder, plumber)” by region, February 2016
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- Figure 57: Agreement with the statement “I am doing more DIY (eg repairs) myself rather than hiring a professional (eg builder, plumber),” by gender, February 2016
- Consumers aged 25-34: cooking more at home to save
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- Figure 58: Agreement with the statement “I try to cook more at home instead of eating out,” by age group, February 2016
- Free activities are attracting more ABC1
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- Figure 59: Agreement with the statement “I choose to do more free activities rather than paid for ones (eg exercise in park versus gym),” by socioeconomic group, February 2016
- Installment payments are becoming less popular
Spending Cuts
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- Eating out, technology, and alcoholic drinks: the first to be cut, when times are though
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- Figure 60: Spending cuts, February 2016
- Cleaning and health products the least likely to be cut
- Southern consumers: The most likely to cut premium food
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- Figure 61: Spending cuts, premium food, by region, February 2016
Interest in Thrift
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- Internet rises as a tool to search for deals
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- Figure 62: Interest in thrift, February 2016
- Reusable packaging is more appealing to young consumers
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- Figure 63: Agreement with the statement “Buying products with reusable packaging,” by age group, February 2016
- Young males also more likely to buy used appliances
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- Figure 64: Agreement with the statement “Buying used appliances rather than brand new ones,” by gender and age group, February 2016
- The need to save provides opportunities for private label products
- Sharing services more likely to be seen as an alternative for ABs to save
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- Figure 65: Agreement with the statement “Sharing services such as carpooling,” by socioeconomic group, February 2016
Appendix – Methodology, Abbreviations, and Supporting Information
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- Methodology
- Fan chart forecast
- Abbreviations
Appendix – Expenditure Overview
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- Figure 66: Best- and worst-case forecast for total consumer expenditure, 2015-20
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Appendix – In-home Food
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- Figure 67: Best- and worst-case forecast for in-home food, 2015-20
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Appendix – Foodservice
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- Figure 68: Best- and worst-case forecast for foodservice, 2015-20
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Appendix – Non-alcoholic Drinks
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- Figure 69: Best- and worst-case forecast for non-alcoholic drinks, 2015-20
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Appendix – Alcoholic Drinks
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- Figure 70: Best- and worst-case forecast for alcoholic drinks at home, 2015-20
- Figure 71: Best- and worst-case forecast for alcoholic drinks on-premise, 2015-20
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Appendix – Beauty and Personal Care
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- Figure 72: Best- and worst-case forecast for beauty and personal care, 2015-20
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Appendix – OTC and Pharmaceuticals
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- Figure 73: Best- and worst-case forecast for OTC and pharmaceuticals, 2015-20
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Appendix – Clothing and Accessories
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- Figure 74: Best- and worst-case forecast for clothing and accessories, 2015-20
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Appendix – Household Care
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- Figure 75: Best- and worst-case forecast for household care, 2015-20
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Appendix – Technology and Communications
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- Figure 76: Best- and worst-case forecast for technology and communications, 2015-20
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Appendix – Leisure and Entertainment
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- Figure 77: Best- and worst-case forecast for leisure and entertainment, 2015-20
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Appendix – Home and Garden
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- Figure 78: Best- and worst-case forecast for home and garden, 2015-20
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Appendix – Transport
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- Figure 79: Best- and worst-case forecast for transport, 2015-20
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Appendix – Holidays
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- Figure 80: Best- and worst-case forecast for holidays, 2015-20
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Appendix – Personal Finance and Housing
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- Figure 81: Best- and worst-case forecast for personal finance, 2015-20
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Appendix – Miscellaneous Expenditure
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- Figure 82: Best- and worst-case forecast for miscellaneous expenditure, 2015-20
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