The Economic Uncertainty Indicator (IIE-Br), calculated by the Getulio Vargas Foundation (FGV), dropped 4.2 points in August and reached 116.6. It is the lowest level since April this year, when it reached 114.9 points. The numbers were released today (31) by FGV, in Rio de Janeiro.
According to FGV, the two components of the Uncertainty Indicator, which are Media and Expectations, moved in a similar direction in August. While the Media component registered a drop of 2.6 points, going to 115.1 points, which contributed negatively with 2.3 points to the aggregate index, the Expectations component, which measures the dispersion in experts’ forecasts for macroeconomic variables, dropped 9.3 points and reached 115.4 points, negatively influencing the evolution of the IIE-Br margin with 1.9 points.
fuel prices
The economist at FGV IBRE, Anna Carolina Gouveia, said that, with the decline in August, the Uncertainty Indicator returns 71% of the highs that occurred between May and July.
She stated that “the reduction of inflationary pressure after the fall in fuel and energy prices and the dynamism of the labor market influenced the result. Despite the drop, the indicator remains at a historically high level, standing above the average high of 115 points observed between July 2015 and February 2020,” she noted.
Anna Carolina added that a more expressive reduction in the indicator will depend mainly on the economic situation in the coming months. “Particularly from the perspective of sustaining the current growth phase, but also from the political framework after the elections,” she concluded.
