Brazil’s trade confidence remains stable in December – Ibre/FGV

The Trade Confidence Index was stable in December, remaining at the level of 87.2 points, the lowest level since April (85.9 points). In the metric of quarterly moving averages, there was a decrease of 4.9 points, the second consecutive one after eight consecutive months of positive results. 

The index was released today (29) by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV).

According to Ibre/FGV economist Rodolpho Tobler, trade confidence ends 2022 at a low level. He pointed out that, after recording a sharp drop in November, the index stabilized in December at a relatively low level, close to what was observed in February this year.

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According to the economist, the stability in the month was due to the worsening in the perception of sales with the present moment, and a slight increase in expectations, but which needs to be relativized by the low level that is still found.

“The negative macroeconomic scenario seems to reflect on trade confidence. As long as the period of high inflation persists, interest rates at a high level, consumers with low average income and high debt, it is difficult to imagine a return to the upward trajectory of confidence of businessmen in the sector”, said Tobler.

According to the survey, despite the stability in the month, there was an increase in four of the six main segments of the sector. In the time horizon, different results occurred. 

The Current Situation Index (ISA-COM) dropped 1 point to 88.7 points, the lowest since March (87.6 points). The two indicators that make up the ISA-COM also fell in the month: the current demand volume fell by 1.2 points and the current business situation, by 0.7 points.

The Expectations Index (IE-COM) increased by 0.9 points, to 86.1 points, influenced by the improvement in the indicator that projects the business trend six months ahead, which rose by 2.8 points to 89.8 points. 

According to the FGV, in the shorter term horizon, forecast sales are not optimistic: the indicator retreated by 0.9 points to 82.8 points, the lowest level since March 2021, when it registered 68.8 points.

QUARTERLY EVOLUTION

“After registering a sharp drop in November and stability in December, trade confidence ends the fourth quarter in decline. The deterioration in the quarter was more influenced by a sharp drop in the ISA-COM, reinforcing the scenario of decelerating demand in the sector. On the side of expectations, there was also a fall, but at a less intense pace. Trade confidence closes 2022 losing part of what was recovered throughout the year”, says Ibre/FGV.

With information from Gazeta Brasil