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Business climate worsens in Latin America: report

Xinhua,May 10, 2018 Adjust font size:

RIO DE JANEIRO, May 9 (Xinhua) -- The climate for doing business in Latin America worsened in April, falling more than 5 points, a leading Brazilian economic think tank said on Wednesday.

According to a study by the Getulio Vargas Foundation (FGV), in conjunction with Germany's Ifo Institute for Economic Research, the region's business climate index (BCI) registered -5.2 points.

The previous quarterly index, issued in January, had shown a small but positive improvement of 1.5 points.

The authors of the study said Latin America's BCI fell along with the expectations index (EI), "which remains at a positive level, but fell 16.6 points" in the three-month period, while the present situation index (PSI) "remained relatively stable in negative territory."

Latin America's eroding business climate is keeping with global trends, the report said.

"The region's index largely followed global BCI," which "went from 26.1 points in January to 16.5 in April, with a stable PSI and a drop from 23.9 to 6.1 points in the EI for the period," said FGV, adding "this fall interrupts a trajectory of improvement observed since October 2017."

According to the foundation, "the results indicate that the global economy continues to be in an expansive cycle, but sees a possibility of deceleration in the pace of economic growth in the second half" of the year.

Of 11 Latin American countries analyzed, five registered an eroding business climate between January and April, led by Argentina (-17.5 points), Brazil (-15.7 points) and Peru (-11.3 points), followed by Bolivia and Colombia.

"Despite this strong retraction, Argentina and Peru remain in a favorable zone," while Brazil "is heading towards an unfavorable climate, and Bolivia and Colombia have been assessed as having an unfavorable economic climate," the FGV said.

Regional countries that saw an improvement in BCI included Chile -- which went from 26.3 to 49.2 points from January to April, thanks to "a strong rise in PSI, which went from -18.2 points in January to 30 in April." Enditem

 

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