Brazil’s trade confidence drops in October to lowest degree since March, says FGV
Index fell by 3.8 points compared to the previous month, reaching 95.7 points
Industry confidence in Brazil plummeted in October and reached the weakest level since March, with both the assessment of the current situation and expectations worsening, informed the FGV (Fundação Getulio Vargas) this Thursday (27).
The Industry Confidence Index (ICI) fell by 3.8 points compared to the previous month, according to FGV data, reaching 95.7 points, the second consecutive decline and the worst result since March 2022.
The Current Situation Index (ISA), which measures the sentiment of entrepreneurs about the present moment of the industrial sector, dropped 4.5 points and was 96.4 points, according to FGV, the lowest level since July 2020, when Brazil was still in lockdown.
“There is a worsening of the assessments of the current situation influenced by a perception of reduced internal and external demand, an increase in the level of inventories and even difficulties in obtaining inputs for some segments”, explained in a note Stéfano Pacini, economist at FGV IBRE.
The Expectations Index (IE), an indicator of the perception of the coming months, fell by 3.0 points to 95.0 points, the weakest result since March this year.
“There is a worsening of expectations that may be related to a predicted global slowdown and a Brazilian economic scenario that considers inflation above the target for 2023 and therefore a more contractionary policy”, added Pacini.
In August, the Brazilian industry once again registered a drop in production, of 0.6%, with emphasis on the losses in petroleum products, according to the most recent data from the IBGE.