Brazil Business Confidence June 2018

Brazil

Brazil: Business confidence deteriorates in June

July 2, 2018

Business sentiment in Brazil declined in June, with the Getulio Vargas Foundation’s (FGV, Fundaçao Getúlio Vargas) business confidence index falling to 100.1 points in June from 101.1 points in May. The index, however, remained just above the 100-point threshold that separates optimism from pessimism among businesses, where it has been for five consecutive months.

According to the FGV, the deterioration in June was driven by a more downbeat outlook on the current economic situation. In addition, an FGV analyst noted in the June press release the negative impact of a trucker strike in May. Meanwhile, confidence in the future economic situation rose to an over five-year high on the back of firms’ improved assessment of hiring and production expectations. However, the strong rise may in part be due to a low base effect.

Panelists surveyed for this month’s LatinFocus report see fixed investment rising 4.2% in 2018, which is down 0.8 percentage points from last month’s forecast. For 2019, panelists expect fixed investment to grow 5.3%.


Author:, Economist

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Brazil Business Confidence June 2018

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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