São Paulo – Latin America is experiencing a phase of economic boom. Expectations for the coming months, however, are not so good. Such is the conclusion of a survey conducted by the Getúlio Vargas Foundation (FGV) in partnership with the Alemão Ifo Institute, disclosed this Wednesday (18th). The region’s Economic Climate Index (ICE) has gone from 5.6 points in April to 6 points in July. Considering the survey’s historical series, indexes higher than 6 points are "very favourable."
The ICE is the combination of the Current Situation Index (ISA), which measures perception of the current situation in the country and its regions, and the Expectation Index (IE), which concerns future estimates. The ISA for Latin America reached 5.8 points in July, as against 4.7 points in April. The IE, in turn, declined from 6.4 points to 6.2 points, according to the survey.
The survey concludes that Latin American economy is booming for the first time since July 2007, when the ICE scored 5.9 points. Prior to that, the most favourable index had been recorded in April of the year 2000, at 6 points. The region’s average ICE over the last ten years was 5.1 points, further confirming that 6 points is a high performance for the Latin American economy. As of January last year, the ICE had dropped to 2.9 points.
In Brazil, the perception of the economy remains good. In July, the ICE was 7.3 points, same as in April. As of January, however, the score was even higher: 7.8. Worldwide, the ICE has dropped from 5.8 points in April to 5.7 points in July. Similar to Latin America, the current situation assessment has improved (according to the ISA) from 4.3 points to 5 points, whereas expectations have worsened, from 7.2 points to 6.4 points.
*Translated by Gabriel Pomerancblum
