Rio de Janeiro – Economic climate in Latin America worsened in July from April, according to the Latin American Economic Climate Index (ICE, in the Portuguese acronym) disclosed this Wednesday (13th) by the Getúlio Vargas Foundation. The index, which is compiled in partnership with the German Institute Ifo, moved down from 90 points in April to 84 points in July. It has declined by 7% in the period to the lowest level since July 2009.
According to FGV’s researcher Lia Valls, the main contribution to this result came from the current moment evaluation, which declined from 82 to 72 points. Brazil, which is the second largest economy in relation to trade, behind Mexico, has shown a decline in all the indexes. Brazil’s score in the economic climate index (55 points) is below Argentina’s (57 points), she noted while pointing out the economic crisis the neighbouring country is facing. The index declined by 22.5% for Brazil from April to July.
"We have seen an acute worsening of the economic climate since the beginning of the year. The expectation has also declined, though less," Lia commented about the region. The expectation sub-index declined from 98 to 96 points in the same period. "What the survey shows is that there will be no short-term improvement on this index," said the researcher.
The Economic Climate in Latin America index dropped while the worldwide it has improved by 3%. The worsening is not influenced by foreign issues, only domestic ones, said the researcher. "While the situation in the rest of the world has been improving, here it has systematically become worse," said Lia.
The ICE is compiled by considering the participation of each country in the region’s trade flow. Among the five main economies, only Mexico had an improvement in the economic climate, which may be due to United States economic rebound, according to the FGV.
*With information from the Newsroom. Translated by Rodrigo Mendonça
