Brazil: Business confidence enters pessimistic territory for the first time in four years
July 29, 2013
According to the Getulio Vargas Foundation (FGV, Fundacao Getulio Vargas), business confidence entered pessimistic territory in July. The index dropped a seasonally adjusted 4% over the previous month and now rests at 99.6 points. The fall was driven by a more negative view of business conditions both currently and in the coming months.
This is the first time in four years that the index is below 100-point threshold separating pessimism from optimism, signalling that pessimism now prevails among businesses. Moreover, the figure is well below the post-crisis peak of 116.6 points recorded in March 2010.
LatinFocus Consensus Forecast participants see fixed investment expanding 4.6% in 2013, which is unchanged from last month's forecast. For 2014, panellists expect fixed investment growth to accelerate to a 5.3% expansion.
Author: Carl Kelly, Economist