Brazil Business Confidence May 2016


Business confidence hits one-year high in May

Business sentiment improved in May, according to the Getulio Vargas Foundation (FGV, Fundaçao Getulio Vargas) business confidence indicator. The index increased a seasonally adjusted 2.2% over the previous month, rising from April’s 77.5 points to 79.2 points. May’s result marked the highest reading since March 2015. Despite the rise, the index remains far below the 100-point threshold and signals that businesses are more pessimistic than optimistic.

According to FGV, firms were notably less pessimistic in May regarding the current and future economic situation. The improvement comes after Dilma Rousseff was forced to step down as president in May amid an ongoing impeachment trial.

Panelists surveyed for this month’s LatinFocus report see fixed investment falling 12.1% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists expect fixed investment to grow 0.9%.

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Brazil Business Confidence Chart

Brazil Business Confidence May 2016

Note: Index of business sentiment (seasonally adjusted). The 100-point threshold represents the point above which businesses expect economic conditions to improve.
Source: Getulio Vargas Foundation.

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