Economic Uncertainty Indicator rises 2.7 points, but remains favorable

After two months of decline, the Economic Uncertainty Indicator (IIE-Br) rose again. In April, it registered an increase of 2.7 points, reaching a total of 106.5 points. The data are from the Brazilian Institute of Economics of Fundação Getulio Vargas (Ibre/FGV), which also reveals that the level remains favorable.

Economist Gilberto Braga points out factors that contributed to Brazil’s level of uncertainty, such as the deterioration of external scenarios, with conflicts in the Middle East and the resumption of large-scale attacks between Russia and Ukraine. For him, this disrupts international trade and increases transaction costs in the global economy.

“In the domestic scenario, disputes regarding the issue of government expenses, such as fiscal anchoring, that is, the control of public spending, and this issue of fiscal anchoring have had a negative perception in terms of confidence, reducing the attractiveness for investments in the Brazilian economy”, he points out.

Confidence in the services sector falls to 94.8 and drops 1 point in April

Irregularities in credit card transactions are among the biggest complaints made to banks

Economist Luigi Mauri explains that another internal factor, in relation to public accounts, is the reduction of the public accounts target to zero deficit in 2025. “We live in a scenario of increased spending and inconstant uncertainty regarding compliance of the federal government in relation to what it proposes, despite the delivery of the new fiscal framework, which was successful”, he points out.

Expectations

Fundação Getulio Vargas reveals that the Expectations component showed a drop of 4.3 points, reaching 90.8 points in April.

According to Mauri, this component captures variations in economic analysts’ forecasts, reported in the Central Bank’s Focus Bulletin survey, for the exchange rate and the Selic rate, 12 months ahead for the Broad National Consumer Price Index. (IPCA) accumulated.

“As there was a low variation in these forecasts, this allowed the index to not advance as much. So we can conclude that despite this advance, FGV analysts still point to a favorable level of uncertainty, which remains below 110 points”, adds the economist.