Economic Uncertainty Indicator oscillates at “uncomfortable level”

In May, the Economic Uncertainty Indicator (IIE-Br) fell by 0.8 points, reaching 111.8 points. The data were disclosed this Wednesday (31) by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV).

The Indicator is built based on the Media component, which is based on the frequency of news mentioning economic uncertainty published by the press vehicles; and by the Expectation component, which considers the forecasts of economic analysts in the Focus survey by the Central Bank.

According to the institute, the IIE-Br has been oscillating since September between 111.7 and 113.3, which is considered an “uncomfortable level of economic uncertainty”. In May, the Media component dropped 2 points, to 110.1 points, and the Expectations component rose 4.7 points, to 114 points.

The FGV/Ibre analysis is that the slight drop is explained by the advancement of the proposed new framework as well as the “relative resilience of economic activity” and the signs of disinflation.

Inflation measured by the General Price Index – Market (IGP-M), released yesterday by the FGV, recorded deflation (price drop) of 1.84% in May ().

In the last two years, the IIE-Br peaked in September 2021, when it reached 131.4 points. The lowest was recorded in February this year, with 111.7 points.