Brazil: Business confidence drops for eighth straight month
August 31, 2011
The business confidence index published by the Getulio Vargas Foundation (FGV, Fundacao Getulio Vargas) deteriorated in August, declining a seasonally adjusted 2.2% to 102.7 points. The decrease reflected a drop in the present situation index (-3.6% month-on-month) as well as in the expectations index (-0.7% mom). After eight consecutive months of moderating business confidence, sentiment currently lies only 2.7 points above the 100-point threshold that separates optimism from pessimism. Moreover, the index is already 11.8% below the post-crisis peak of 116.5 points tallied in March last year. Falling optimism in the business community is likely to dent investment growth going forward.