In February, the Economic Uncertainty Indicator rose again, reaching a significant 115.1 points. The highest index since September last year.
The Economic Uncertainty Indicator (IIE-Br) is calculated by the Getúlio Vargas Foundation (FGV). Its objective is to measure the uncertainty of the Brazilian economy according to information collected from three sources: the country's main newspapers, the Ibovespa Index and the financial market's expectations regarding 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.
Since it has been above 110 points in almost every month since July 2015, the index is considered to be at a high level. The score is close to the average of the last five years: 115 points. FGV believes that, in recent months, the index has been impacted by external factors.
Index components
The 2.2-point increase in February occurred in both components of the index. The Media component contributed 1.2 points to the increase. The other point added to the score was the forecasts of economic analysts made by the Central Bank's Focus survey, which provides numerical projections for inflation, the exchange rate and the Selic rate. These assessments are recorded 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 half-year period and in five other isolated months. During this period, in most cases, factors related to the domestic environment sustained the 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 global economy in 2020”, reports Aloisio Campelo Jr, Superintendent of Public Statistics at FGV IBRE.
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