The Brazilian Economy Uncertainty Indicator (IIE-Br) rose 0.2 point from June to July, to 120.8 points, informed the Getulio Vargas Foundation (FGV).
The level is the highest since March this year, when the index had reached the mark of 121.3 points.
According to FGV, the result continues to be influenced by inflationary pressure in Brazil and worldwide and by the policy of global monetary tightening.
“In Brazil, in addition, there was a worsening of the fiscal scenario for 2023, and of the political scenario, with the proximity of the presidential elections. Given this scenario, it is possible that the indicator will continue to fluctuate at still high levels in the coming months”, says Anna Carolina Gouveia, economist at the Brazilian Institute of Economics at FGV (Ibre/FGV), in an official note.
The IIE-Br is made up of two components: the IIE-Br Mídia, which maps the frequency of news with mention of uncertainty in the main newspapers; and the IIE-Br Expectation, which is constructed from the dispersion of forecasts for the exchange rate and for the IPCA.
The Media component rose 3.0 points in July to 117.7 points, contributing 2.6 points to the month’s IIE-Br. The Expectations component dropped 11.1 points, to 124.7 points, with a negative contribution of 2.4 points.
“Despite the strong decline in the Expectation component, this indicator remains at a high level, reflecting the heterogeneity of experts’ forecasts for key variables in the economy. The July decline returns only 31% of the 36.2-point increase between February and June,” adds Gouveia.
The collection of the Brazilian Economic Uncertainty Indicator is carried out between the 26th of the month before the 25th of the reference month.
Source: CNN Brasil
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