Confidence of the industry in Brazil has retraction of 1.6 points in the month of May

2023-05-31 14:30:00

The Getúlio Vargas Foundation (FGV) gave information that the confidence of the industry in Brazil had a not very favorable result, getting worse in the month of May. The Foundation said the scenario was seen as challenging with fears of inflation and high interest rates in the way. This worsening represents the fall, which also occurred in the face of warnings issued by the government.

The Industry Confidence Index (ICI) by FGV Ibre decreased by 1.6 points in May to 92.9 points, the amount that existed before, much higher than the current one. And the Current Situation Index (ISA), responsible for measuring the perception of entrepreneurs in relation to the current situation, lost 1.7 points to 91.8 points. At the same time, the Expectations Index (EI) also dropped, falling to 94.0 points.

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_{The Current Situation Index (ISA) measures business confidence and recorded a 1.7-point drop (Photo: Reproduction/Correio Braziliense/FGV)}

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FGV Ibre economist, Stéfano Pacini, spoke about the reasons for the industry’s decline: “Industry confidence slowed down again, influenced not only by the perception of a worsening of the current situation, but also by the pessimistic outlook for the coming months… in entrepreneurs who project a reduction in production and a negative trend for business in the next six months similar to that observed during the pandemic period in 2020”, he clarified.

This case of falling confidence in the industry took place in the face of the respective current political scenario, in the midst of warnings issued by the government of President Luiz Inacio Lula da Silva in relation to economic activities, more specifically the impact of high interest rates. Still in this regard, currently the basic interest rate that is the Selic is 13.75% per year, a level that is considered necessary to contain inflation expectations.

Featured Photo: Confidence in Brazil’s industry has fallen in mechanical sectors as well. Reproduction/Industry News Agency.