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The business climate in Latin America falls to its lowest level in almost two years

This content was published on May 24, 2022 – 23:05

Rio de Janeiro, May 24 (EFE) .- The business climate in Latin America fell in the second quarter of 2022 to its lowest level in nearly two years, affected by the war in Ukraine, according to the indicator measured by the center Brazilian economic studies Foundation Getulio Vargas (FGV) and disclosed this Tuesday.

According to the FGV, which consults 145 specialists from 15 countries on a quarterly basis, the so-called Economic Climate Index (ICE) for Latin America stood at 67.3 points in the second quarter of this year, its lowest level since the third quarter. of 2020 (65.3 points).

The indicator has been gradually falling from the 101.4 points it reached in the third quarter of 2021, when the region seemed to have overcome the serious economic crisis caused by the covid pandemic.

The worsening of the business climate once again placed the indicator below pre-pandemic levels (85.9 points in the first quarter of 2020) and below both the first quarter of this year (79.0 points) and the same period last year (85.0 points).

“The region’s economy is better than during the height of the pandemic and when there were still no vaccines, but it failed to recover the levels of 2019,” according to the FGV.

The worsening in the last quarter was attributed to the negative effects of the war in Ukraine, since only one country out of the ten analyzed -Colombia- considers that the armed conflict will have a favorable impact on economic growth given the expected increase in raw material exports.

According to the study center, in the deterioration of the climate for business in the region, the decline in the Expectations Indicator, which measures the projection of economists for the situation in the next six months and which fell from 108, had more weight. 6 points in the first quarter to 87.2 points in the second.

For its part, the Current Situation Indicator, with which economists evaluate the current situation, only fell from 52.3 points to 48.8 points.

By country, the one with the highest Economic Climate Index in the second quarter was Uruguay, with 149.6 points and the only one in a situation considered favorable (above 100 points), followed by Colombia (95.7) and Paraguay ( 91.2).

In the unfavorable zone were Ecuador (72.1 points), Mexico (66.2), Bolivia (65.9), Peru (63.4) and Brazil (62.7), and in the most critical zone Chile ( 46.0), Argentina (39.1) and Venezuela, which was no longer evaluated.

Of the countries evaluated, only two registered an improvement between the first and second quarters: Uruguay rose 14.2 points and Brazil 2.1 points. On the contrary, those that lost the most points were Argentina (27.9), Chile (25.7), Paraguay (22.4) and Ecuador (21.6).

Regarding the projection for the economic growth of each country this year, the best placed is Colombia, for which an expansion of 4.3% is expected in 2022, followed by Bolivia (4.0%), Uruguay (3. 8%), Peru (2.9%), Ecuador (2.8%), Argentina (2.8%), Mexico (1.9%), Chile (1.5%), Paraguay (1.2% ) and Brazil (0.8%).

The countries whose projection of economic growth in 2022 fell the most between the first and second quarters were Paraguay, with a drop of 2.4 percentage points, Chile (-0.9 points) and Mexico (-0.6 points). EFE

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