Rio de Janeiro – The Brazilian economic activity may have a worse performance in 2015 compared to this year, according to two indicators developed in partnership by the Brazilian Institute of Economy of Fundação Getúlio Vargas (Ibre-FGV) and the North American organization The Conference Board. The Composite Leading Indicator of Economy (Iace) for Brazil dropped slightly in 1.2% in November, when it reached 119.1 points, after a slight increase of 2% in October and a drop of -0.4% in September.
This indicator is calculated based on components that include the Ibovespa, the Pre-DI swap (360 days) reference rate, the expectation indexes of the industry, services and consumers, the durable consumer goods physical production index and the exports term of trade indexes of Fundação Centro de Estudos do Comércio Exterior (Funcex).
For Ibre-FGV’s economist Paulo Picchetti, this reduction points to a scenario of low economic activity and reflects the uncertainty arising from the electoral process with the changes in the economic team and also the economic data that have been released. “The tight fiscal policy announced recently in 2015, despite being necessary, probably will restrict economic growth in the short term”, he said. Picchetti believes the economy recovery will only come in 2016.
*Translated by Sérgio Kakitani
