The FACAMP Economic Trend Index (ITE/FACAMP) fell by 0.3 from March to April 2023, already discounting seasonal effects. This is an interruption of the index’s recovery at the margin and a deceleration in the interannual comparison (3.4 in April compared to 4.9 in March). However, the accumulated 12 months rose slightly, indicating that the recovery trend in activity in relation to 2022 has not yet reversed.
The negative result at the margin in April indicates a worsening of the macroeconomic scenario from the second quarter onwards. The recurrent declines in industrial production and the timid performance of retail and the services sector in the period reflect the weakening of the internal market in a context of stagnation in the labor market, high household indebtedness and high interest rates.
At the same time, the expressive result of agriculture in the first quarter tends not to be repeated in the coming quarters, given the exceptionality of the superharvest of grains and external demand below expectations, due to the recessive scenario in developed countries, and the slow recovery of Chinese economy.
– The quarterly moving average evaluates the result of the variation of the last moving quarter, that is, it compares the average of the last three months, including the current month, with the average of the three months prior to the current month. By considering the moving average of the last quarter, its result ends up being smoother and capable of capturing a less volatile trend in the series being analyzed.
– ITE/FACAMP is calculated based on energy consumption, taking public information made available by the Electric Energy Trading Chamber (CCEE). The ITE has a Pearson correlation coefficient (r) of 0.85 against the Central Bank’s IBC-br in April 2023. In relation to GDP, the correlation coefficient is 0.79 in the first quarter of 2023. more details about the ITE/FACAMP methodology, see https://www.facamp.com.br/pesquisa/economia/nec-facamp/
“In this context and, given the deceleration of inflation in recent months, the fall in the Selic becomes crucial to relieve the domestic market and provide some horizon for businessmen and families”, says Professor Saulo Abouchedid, from Facamp. Short-term measures, such as the recent tax relief for the automobile sector, and the first impacts of the new Bolsa Familia program may also offset the negative indicators of economic activity in the coming months.
Thus, even if the carry-over for the Brazilian economy in 2023 – annual growth rate if GDP in the next three quarters remains stagnant – is at 2.5%, it will be very difficult to avoid a drop in economic activity in the coming quarters. Considering this difficulty, the NEC/FACAMP forecast for GDP growth in 2023 is 2%.
O BroadcastGrupo Estado’s real-time news system, publishes the indicator between the 10th and 15th of each month.
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