Global Leading Indicators

The Conference Board Leading Economic Index® for Brazil, together with Fundação Getulio Vargas, decreased by 0.4 percent in October 2022 to 115.9 (2016=100), after increasing by 1.0 percent in September. The LEI rose by 2.1 percent in the six-month period from April to October 2022, a turnaround from the 1.7 percent contraction over the previous six-month period.

The Conference Board Coincident Economic Index® for Brazil, together with Fundação Getulio Vargas, remained unchanged in October at 108.8 (2016=100), after a slight increase of 0.2 percent in September. The CEI grew by 2.0 percent in the six-month period between April and October 2022, a continuation of the 3.0 percent growth over the six-month period from October 2021 to April 2022.

“The decrease in the Brazil LEI in October suggests the recent growth trajectory of the economy may be stalling heading into 2023,” said Andrew Dearborn, Economic Research Assistant at The Conference Board. “The decline in the LEI was driven primarily by its nonfinancial components, led by manufacturing and services activity expectations while consumer expectations also worsened. Beyond domestic factors, tightening monetary policies and potential recessions in major economies (such as the US and the Euro Area), suggest Brazil’s economy may face headwinds in the near term. The Conference Board still forecasts year-over-year real GDP growth to slow to 1.5 percent in 2022 before turning slightly negative in 2023.”

Despite the relative improvement, the trajectory of the Brazil LEI points to a lack of growth momentum

While nonfinancial components drove the LEI improvement earlier in 2022, the latest readings show their contributions have now turned negative

The Conference Board/ Fundação Getulio Vargas Brazil LEI decreased in October

About The Conference Board Leading Economic Index^® for Brazil, together with Fundação Getulio Vargas (TCB/FGV Brazil LEI): The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by approximately 6 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.

The seven components of The Conference Board Leading Economic Index^® for Brazil, together with Fundação Getulio Vargas (TCB/FGV Brazil LEI) include: Swap Rate - 1 year*, Ibovespa - Bovespa Index, Manufacturing Survey - Expectations Index, Services Sector Survey - Expectations Index, Consumers Survey - Expectations Index, Terms of Trade – Index, Physical Production - Durables Consumer Goods – Index, and the Exports - Quantum - Index.

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ABOUT FGV IBRE

Created in 1944, FGV is a Brazilian private higher education institution, think tank and producer of statistics, with a mission "to foster Brazil’s socioeconomic development." The Brazilian Institute of Economics (IBRE) is FGV´s arm with the mission to produce and disseminate high-quality economic statistics and studies that are relevant to improve policies and private action in Brazil. www.fgv.br/ibre