São Paulo – The evaluation of international institutions regarding Brazil worsened in May as against February this year. The evaluation dropped in aspects like inflation for the coming 12 months, credit conditions, infrastructure and violence. This information is included in the fourth edition of the “International Perception of Brazil Monitor” presented on Thursday (16) by the Institute of Applied Economic Research (Ipea), in São Paulo. The study, on the other hand, shows that the in the point of view of the 170 international institutions researched, the Country’s influence in international organisation’s has increased.
The report was created in 2010 and is promoted every three months. The edition disclosed on Thursday has figures for May 12th to 26th. Of the 170 institutions that answered the electronic questionnaire, 22% are embassies and consulates, 20% are chambers of commerce, 48% are foreign companies and 10% are international organisations.
The perception of interviewees is “moderately unfavourable” regarding inflation rates in the country for the coming 12 months. In May, the answers to this question reached the level of -24 (in February the total was -10). Conditions for the obtaining of credit, which had reached -7 in February, dropped to -14 now, a level considered “neutral”.
“Worsening was identified in the forecasted inflation and in restriction to credit, which also reflects in the monetary policy,” said Ipea president Marcio Pochmann. The foreigners, however, believe that Brazil will not stop attracting investment. In May, the +35 evaluation showed a favourable tendency for the country to remain in the 4th or 5th position in the foreign investment attraction ranking over the next 12 months. In February, the level was +38.
In research, each interviewee attributed to each of the 15 questions a number of points according to their perception of Brazil. An average perception of points between +60 and +100 shows a very favourable perception of Brazil. If the point average is between +20 and +60, the perception is considered moderately favourable +20 and –20 points, it is evaluated as neutral,–20 to –60 is considered moderately unfavourable and–60 to –100 is considered greatly unfavourable to Brazil.
Of all the questions, six referred to the “Economic” aspect, six to “Politics, Government and Institutions” and three were related to the “Society”.
The "Economic" average reached +4 in May, a reduction as against the previous average, of +8. The average points for “Politics, Government and Institutions” reached +11 in May. In February the evaluation of those researched had resulted in an average of +16. Questions related to "Society" reached +12, practically stable as against February, when the average had reached +13. The average for each aspect points to a neutral perception of Brazil by foreigners.
In the “Society” aspect, the evaluation of foreigners worsened with regard to violence in the country: it was –5 (neutral) in February and reached–33 (moderately pessimistic) in May. To the planning and research technician at the Ipea, André Pinelli, some answers to the question may have been influenced by the situation the country was living when the research took place.
With regard to Brazilian influence in international organisations, the perception of interviewees is that it has grown. In February, the number of points reached (+14) was lower than that registered in May (+24). Pochmann said that this may be due to the perception of the Lula government abroad in the second half of 2010. “There was strong country presence in international forums, though this term in office has been more discreet up to now,” he said, referring to the first months in office of president Dilma Rousseff.
The perception of the Gross Domestic Product (GDP) for the coming 12 months should be between 3.6% and 6%. In February, this index totalled +40. Now, it has reached +44.
Apart from the 15 questions made in the research, the IPEA made another two questions. In one of them, the institute inquired about the possibility of inflation above the 4.5% target for 2012. The evaluation of institutions points at a 57% probability of that happening. The other question was regarding the evaluation by those interviewed of the Central Bank’s inflation fighting policy. For 76%, the strategy and measures, with higher interest rates, is correct, though the effect is limited due to inflationary pressures, with appreciated commodities. Another 13% find the policy wrong as interest rates are below the necessary value. Another 11% evaluate the policy correct for alleviation of inflation.
*Translated by Mark Ament
