Brazil: Business confidence hits new record low in May

Business sentiment deteriorated further in May, according to the Getulio Vargas Foundation (FGV, Fundaçao Getulio Vargas) business confidence indicator. The index decreased a seasonally-adjusted 1.6% over the previous month and now stands at 71.6 points, the lowest level since the index began in October 2005. In April, the index stood at 72.8 points, which had also marked a record low. As a result, the index remains far below the 100-point threshold that signals that businesses are more pessimistic than optimistic.

According to FGB, firms were more pessimistic in May regarding both the current economy and their expectations of the future situation.

LatinFocus Consensus Forecast participants see fixed investment falling 6.3% in 2015, which is down 0.3 percentage points from last month’s forecast. For 2016, panelists expect fixed investment to expand 1.9%.