In February, the Economic Uncertainty Indicator rose again, reaching a significant 115.1 points. Highest index since September last year.
The Economic Uncertainty Indicator (IIE-Br) is calculated by the Getúlio Vargas Foundation (FGV). And it aims to measure the uncertainty of the Brazilian economy according to information collected from 3 sources. From the main newspapers in the country, from the Ibovespa Index and from the expectations of the financial market in relation to macroeconomic variables.
According to data released this Friday (28), by the institution, the index rose again in February and reached 115.1 points, the highest index since September 2019, when it hit 116.9.
As it has been above 110 points in practically every month since July 2015, the index is at a level considered high. The score is close to the average of the last five years: 115 points. The FGV assesses that, in recent months, the index has suffered an impact due to external factors.
Index Components
The increase of 2.2 points in February occurred in the two components of the index. The Media component contributed 1.2 points to the increase. The other point of addition of the score is the forecasts of economic analysts made by the Focus survey of the Central Bank, which makes numerical projections for inflation, the exchange rate and the Selic rate. These assessments are accounted for in the Expectations component of the indicator.
“Since July 2015, the FGV Uncertainty Indicator has remained above the high level of 110 points, with an average of 115 points, except for the September 2017-February 2018 semester and in other five isolated months. During this period, most of the time, factors related to the internal environment sustained high levels of uncertainty. In the last three months, however, the shocks that brought the indicator back to the average of recent years originated abroad. First, the US-China trade war, then the US-Iran conflict and, in February, the coronavirus epidemic, with its possible impacts on the performance of the world economy in 2020”, reports Aloisio Campelo Jr, Superintendent of Public Statistics at FGV IBER.
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