Uncertainty of the Brazilian economy falls to lowest level since November 2019

The Brazilian Uncertainty of the Economy Indicator (IIE-Br) fell 4.9 points in September to 111.7 points, the lowest level since November 2019, from 105.1 points.

The data were released today, 30, by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV).

Ibre/FGV economist Anna Carolina Gouveia said that the IIE-Br is now only slightly above what can be considered a comfortable level of uncertainty (below 110 points) for the first time since the onset of the covid-19 pandemic.

According to her, the result is motivated by the improved economic activity and labor market scenario and the reduction of inflationary pressure in recent months.

“The electoral scenario seems to have little influence on the indicator so far, and the convergence of the IIE-Br to levels below 110 points will depend on the outlook for the continuity of the current growth phase and the post-election political scenario,” explains the economist in a note.

“In September, the Media component fell 4.5 points, to 110.6 points, the lowest level since November 2019, contributing negatively with 3.9 points to the aggregate index.

The Expectations component, which measures the dispersion in specialists’ forecasts for macroeconomic variables, retreated 3.8 points, to 111.6 points, the lowest level since March of this year, with a negative contribution of 1 point to the evolution at the IIE-Br margin,” says FGV.

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