The Brazilian Economic Uncertainty Indicator (IIE-Br) rose 0.6 points from December to January, to 113.3 points, informed the Getulio Vargas Foundation (FGV). This is the fourth increase in a row for the index and reflects the discussions about the effective economic policy of the new government, with possible implications on the direction of the public debt and inflation, evaluates FGV/Ibre economist Anna Carolina Gouveia.
The IIE-Br consists of two components. The first is the IIE-Br Expectation, built from the dispersion of forecasts for the exchange rate and for the IPCA, which fell 11.9 points in January, to 106.0 points, after having risen in the previous month, reaching and January the lowest level since November 2022, when it reached 105.1 points. As a result, the component contributed negatively with 2.6 points to the aggregate variation of the IIE-Br in January.
The other component, IIE-Br Mídia, maps the frequency of news mentioning uncertainty in the main newspapers. The component, which had fallen in December 2022, rose 3.7 points to 113.8 points, the highest level since August 2022 (115.1 points) and contributed 3.2 points to the aggregate index.
“It is worth mentioning that in the days following January 8, when the buildings of Congress, STF and Palácio do Planalto were invaded by demonstrators advocating a coup d’état, the level of uncertainty rose even further and then receded a little. The IIE-Br starts the year at a high level of uncertainty and does not show signs of convergence towards more comfortable levels in the short term”, says Gouveia.
Source: CNN Brasil
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