Brazil’s business confidence index (BCI) dipped in May to its lowest level since November 2017, dragged down by the slow pace of economic recovery, according to a report released Tuesday.
The report by Brazil’s Getulio Vargas Foundation (FGV), a policy think tank, showed the BCI decreased 0.6 in May to settle at 92.8 points, the lowest level since November’s 92.1 points.
“After remaining stable at the beginning of the year, business confidence retracted for the second month in a row, influenced by dissatisfaction with the slow pace of the economy, political uncertainty and poorer external outlooks,” the FGV said.
The index could slump considerably in June, because this survey was carried out before a massive nationwide truckers’ strike paralyzed Brazil for over a week starting May 21, leading to economic losses for many businesses, the foundation said.
Confidence was most eroded in the sales (-4.1 points) and services (-2.4 points) sectors, while the BCI remained steady in the industrial and construction sectors.
Brazil is recovering from its worst recession ever, which saw the economy shrink in 2015 and 2016, with GDP falling 7 percent.
In 2017, Brazil’s economy grew one percent, and this year’s forecast called for 3 percent growth, but high unemployment and lower domestic spending has curtailed expansion.
The latest market forecast calls for 2.37 percent growth.
Unemployment was at 12.9 percent for the three-month period from February to April, meaning 13.4 million people were out of work, the state statistics agency IBGE said Tuesday.