Latin America’s business climate improves but remains at unfavorable level

The business climate in Latin America improved in the fourth quarter compared to the third quarter, although the indicator is still unfavorable, according to a report released Wednesday in Brazil.

The Economic Climate Indicator (ECI), released quarterly by the Brazilian think tank Getulio Vargas Foundation (FGV), rose 11.8 points to 66.5 units, an unfavorable level below 100 points, which marks the boundary between the favorable and unfavorable zone.

The ECI has remained at an unfavorable level since the third quarter of 2013, except for the fourth quarter of 2017, the first quarter of 2018, and the third quarter of 2021.

According to the report, the improvement in the indicator between the third and fourth quarters of this year is due to a growth in the Current Situation Indicator (TSI), which advanced from 22.7 points to 67.0 points. In contrast, the Expectations Indicator (EI) varied from 0.6 units, indicating stability, to 66.1 units.

With an increase of 30.0 points in the ECI, Brazil improved the business climate in Latin America in the fourth quarter.

The other countries that improved their business climate were Mexico, Paraguay, Peru, and Bolivia.

In summary, there was an improvement in the current situation for doing business in Latin America, led by the region’s largest economies. However, expectations for the coming months advanced little or declined.

Currently, only two countries, Paraguay (114.7 points) and Uruguay (108.2) are at a reasonable level, while Argentina (21.8 points) and Chile (34.5) are the worst performers.