The Coincident Global Economic Barometer rises 1.5 points in December to 91.8 points, while the Leading Barometer increases 3.3 points to 105.9 points, the highest level since September 2021 (108.5 pts.). In both cases, the Asia, Pacific & Africa region makes the largest contribution to the increase, while the other regions contribute much less. With the stronger rise in the Leading Barometer this month, the difference between the two Global Barometers is now 14.1 points, the largest since March 2021 (17.1 pts.)
“The Coincident Barometer shows the world economy in a phase of recovery, although it continues to grow below its potential, limited by uncertainties in relation to the evolution of inflation in the western industrialized economies and by the phase of adjustments to the Chinese real estate market. The Leading Barometer signals that this phase will be sustained on the three-to-six-month horizon, which can be interpreted as a favorable result given analysts’ fears of a reversal of the current phase due to increased chances of maintaining higher interest rates for a longer period to combat inflation in various countries”, evaluates Aloisio Campelo Jr., researcher of FGV IBRE.
Coincident Barometer – regions and sectors
The increase in the Coincident indicator is mainly driven by the 1.3-point contribution of the Asia, Pacific & Africa region, while Europe contributes 0.2 points, and the Western Hemisphere remains constant. The regional indicators signal continued lukewarm global economic activity in gradual recovery, influenced by the various economic challenges faced by several countries. The graph from the press release illustrates the contribution of each region to the deviation of the Coincident Barometer from the historical mean of 100 points.
All the Coincident sector indicators evolve positively in December, except for the Services sector, which decreased this month. The Trade (retail and wholesale) indicator continues to progress favourably since July of this year, drawing away from the other sectors and reaching the neutral level of 100 points.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. In December, the positive regional contributions come from the three regions, with the Asia, Pacific & Africa region standing out with 2.1 points, followed by the Western Hemisphere and Europe, with 0.7 and 0.5 points, respectively. The levels of the indicators suggest a more widespread outlook of acceleration in the growth rate in the main regions, with the indicators for Europe and the Western Hemisphere fluctuating around the neutral mark of 100 points and the indicator for the Asia, Pacific & Africa region taking a more optimistic stance.
In December, all the Leading sector indicators increase except for Economy (aggregated business and consumer evaluations), which remained constant. The indicators for Services and Trade record their highest levels since the end of 2021, reflecting a positive outlook in relation to the coming months.