FGV Report: Brazilian Business Sector Confidence Returns to Pre-Pandemic Levels

RIO DE JANEIRO, BRAZIL – Brazilian business-sector confidence in the economy rose 3 points in September to pre-pandemic levels, according to a report released by the Getulio Vargas Foundation (FGV)

FGV, a leading economic think tank, said the Business Confidence Index (ICE) reached 97.5 points in September, 1.5 units higher than in February, before the arrival of the novel coronavirus (COVID-19) pandemic.

According to the FGV, the index consolidates increases in confidence in four sectors of the Brazilian economy: industry, services, commerce and construction.

Meanwhile, the Current Business Situation Index (ISA) rose 4.4 units to 93 points, surpassing the 92.5 points it registered in February, and the Expectations Index (IE) rose 4.9 units to 101 points, recovering 97 percent of what it lost in March and April, according to the report.

Brazilian business owners showed a certain neutrality (neither optimism nor pessimism) on the evolution of business in the coming months, except in the industrial sector, where there was optimism, the report added.

The industrial sector showed the highest growth in optimism in September. Trade and construction remained neutral, while the services sector showed a slower recovery, due to a poor perception of the current situation.

Increase in business confidence coincides with the recovery of the country’s economic indicators, which have rebounded from the strong negative impact of the pandemic.

In recent months, Brazil’s economy has shown signs of recovery, though that will not prevent gross domestic product (GDP) from dropping 5.04 percent this year, according to the latest forecast from the financial market.