Rio de Janeiro – Uncertainty surrounding the global economic scenario has caused the Latin American Economic Climate Index (ICE, in the Portuguese acronym) to drop from 5.6 to 4.4 points from July to October this year, a score lower than the historical average of 5.1. The result, announced this Wednesday (16th) by the Getulio Vargas Foundation (FGV), indicates the beginning of a period of decline in the region, after an economic boom which lasted from July 2010 to July 2011, according to the FGV researchers.
The ICE indicator is a summed up version of the Latin America Economic Survey, carried out on quarterly basis by the German Ifo institute and FGV. The Current Status Index (ISA) has dropped from 5.9 to 5.2 points. Despite the decline, the document highlights that scores above 5 points mean that the situation remains favourable, in spite of the current situation. In turn, the Expectation Index (IE, in the Portuguese acronym) has dropped from 5.3 to 3.5, the lowest score since January 2009 (2.3 points). The decrease indicates pessimism regarding the coming months.
According to FGV, the worsening economic environment in Latin America is in keeping with the worldwide trend. The ICE surveyed by the Ifo for 119 countries has gone from 5.4 to 4.3 points between July and October. The Economic Climate Index dropped in October in Mexico and all South American countries, except Peru.
*Translated by Gabriel Pomerancblum
