Rio de Janeiro – The Brazilian Economy Uncertainty Indicator, measured by Fundação Getulio Vargas (FGV) dropped 8.5 points from January to February of this year. The index went from 127.3 to 118.8 points, the lowest level since May 2015. The Economy Uncertainty Indicator consists of three different parts: the frequency of news features mentioning uncertainty in print and online; forecasts by experts regarding the foreign exchange market and official inflation rate and the volatility of the financial market.
According to the FGV, the result seems to reflect favorable news, such as the decline of the inflation rate and of the benchmark interest rates, plus the enactment of constitutional amendment 95, which cuts public spending. However, according to FGV, much caution is needed with the results since external factors, such as the ongoing investigations of Operação Lava Jato and setbacks during attempts made to approve other measures could revert the decline of the index.
*Translated by Sérgio Kakitani