The Economic Climate Index (ICE) in Latin America – developed jointly by the German Ifo Institute and FGV – rose for the third consecutive quarter between October 2018 and January 2019, from -10.7 points to -9.1 points, but the index still has not made it out of the unfavorable range. This improvement was influenced by the upsurge in the Expectations Index (IE), which rose from 21.6 points to 25 points in the same period. The Current Situation Index (ISA) showed a slight recovery, but remains negative and still very close to the rate recorded in October 2018 (varying only 0.3 point).

The ICE’s improvement across Latin America was driven mainly by survey results in Brazil. The country was one of the few to reach a higher ICE in the last two surveys. Brazil’s ICE rose from -33.9 points in October 2018 to 3.6 points in January 2019. This recovery can be explained by the 240% upsurge in the expectations index, which leaped from 25.9 to 88 points in the period.

The global Economic Climate Index (ICE) dropped and still lingers in the unfavorable range, influenced by the drop in indexes measuring both the current situation and expectations. The ISA is still in the positive range, despite dropping from 12.2 points to 2.2 points between the last two surveys. The IE, which had been showing unfavorable results since July 2018, dropped once again in January, down to -2.7 points.

The global ICE is systematically better than the Latin American index since April 2013, but the current survey revealed that the tables have turned. Latin America’s ICE has been recording negative results since that period. The better results recorded in January 2019 point to a more favorable scenario, although still only anchored on rising expectations.

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