Indicator shows high economic uncertainty for the sixth consecutive month
The Economic Uncertainty Indicator for Brazil (IIE-Br) of FGV’s Brazilian Institute of Economics (IBRE) rose 1.5 points between July and August 2018, up to 114.2 points. As a result, the indicator remained in the high uncertainty range (over 110 points) for the sixth consecutive month.
“Despite the slight drop in the month, the Uncertainty Indicator remained high. Among the factors behind this result are the high levels of electoral uncertainty, since it is still undetermined whether the next administration will implement the much-needed tax adjustments, for example. Uncertainty has also increased abroad. The Turkish lira crisis helped cast a bigger shadow of economic uncertainty in Brazil, ultimately affecting the country’s exchange rate compared to the U.S. dollar. Based on this scenario, we expect the indicator to continue rising over the next few months”, said IBRE researcher Raíra Marotta.
The Expectation component was the main driver behind the IIE-Br’s drop in August. The Media component dropped 0.3 points, contributing 0.3 points to the general index’s result in the month, while the IIE-Br Expectation component fell 8.2 points, contributing -1.8 points to the consolidated index.
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