Brazil: Business remains broadly unchanged supporting continued investment growth
March 31, 2011
The business confidence index published by the Getulio Vargas Foundation (FGV, Fundacao Getulio Vargas) remained broadly unchanged in March, dropping a seasonally adjusted 0.1% to 112.4 points. The slight decrease was driven by a fall in the expectations sub-index, which reflected a less optimistic assessment of the economic situation for the next six months, as the monetary tightening implemented by the Central Bank since last December begins to affect business borrowing costs. However, the deterioration in the expectations component was broadly offset by an improvement in sentiment regarding the current economic situation. Despite three straight months of moderating confidence, business sentiment remains at historically high levels, standing only 3.0% below the post-crisis peak of 116.9 points recorded in the same month last year. That said, the index continues to hover above the 100-point threshold after breaking into optimistic territory in August 2009.