Brazil Business Confidence August 2016


Business confidence weakens in August

Business sentiment moderated in August, according to the Getulio Vargas Foundation (FGV, Fundaçao Getúlio Vargas) business confidence indicator. The index decreased a seasonally adjusted 1.1% over the previous month, falling from July’s 87.1 points, which had marked the highest reading since November 2014, to 86.1 points. As a result, the index remains below the 100-point threshold that signals that businesses are more pessimistic than optimistic.

According to FGV, firms were more pessimistic in August regarding the future economic situation, while their assessment of Brazil’s current economic situation was unchanged. Businesses’ confidence in their future economic situation experienced a moderate decrease falling from 89.0 points in July to 87.3. The index tracking sentiment about the current economic situation rested at 85.2 points in August.

Panelists surveyed for this month’s LatinFocus report see fixed investment falling 11.7% in 2016, which is unchanged from last month’s forecast. For 2017, panelists expect fixed investment to grow 1.7%.

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Brazil Business Confidence Chart

Brazil Business Confidence August 2016 1

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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