Rio de Janeiro – The Economic Climate Indicator (ECI) for Latin America improved slightly from -43.2 to -39.3 points in the fourth quarter from the third. Despite the 3.9-point improvement, the indicator remains negative.
Issued this Tuesday (24) by think tank Fundação Getulio Vargas (FGV), the ECI is based on the geometric mean of the Current Situation Indicator (CSI) and the Expectations Indicator (EI).
The ECI was driven up primarily by an increase in the CSI. “The crisis supposedly was at its worst in the third quarter, after which the region might move on to a stage of recovery. The fourth quarter survey confirmed that scenario by showing improve in both the CSI and the EI indicators. However, both have increased by relatively small amounts, and the CSI remains on the unfavorable range of the spectrum,” FGV said.
The Economic Climate Indicator has gone up in all Latin American countries except Argentina and Brazil. Nevertheless, indicators remain at unfavorable levels in all countries surveyed. In Argentina, the ECI was down 13.5 points to -41 in Q4. In Brazil, it dropped marginally, from -32 to -32.8 in Q4 from Q3. The country with the best indicator is Paraguay, followed by Uruguay and Colombia.
Main issues
The Latin America Survey inquires what are the main issues facing national growth in the countries at hand. Issues rated higher than 50% are considered relevant. Q4 issues, from the bigger to smaller, were lack of innovation, inadequate infrastructure, corruption, mounting income inequality, and insufficient demand.
Translated by Gabriel Pomerancblum
