The Global Economic Barometers increase markedly for the second successive month. This reflects, among other things, the progress in vaccination programs against COVID-19 in various countries and thus the perspective of accelerating the level of global activity in the coming months. This month, all investigated regions improve both their current assessment of the situation and their expectations for the near future.
The Coincident Global Barometer rises by 13.0 points in April, from 102.8 points to 115.8 points, reaching its highest level since 2011. The Leading Global Barometer increases 9.2 points, to 125.9 points, its highest level since June 2010. All regions developed positively this month, both regarding the assessment of the present situation and the expectations for the near future.
“The concrete effects of the advance in immunization programs in various countries on the level of economic activity are reflected in the increase in the coincident barometers in April across all the regions and sectors. Despite problems in certain important logistical chains, the performance of the leading barometers signals optimism for the coming months in the context of controlling the health crisis, recently approved fiscal stimulus measures for the North-American economy, and the strong expansion of the Chinese economy”, evaluates Paulo Picchetti, researcher of FGV IBRE.
Coincident Barometer – indicators of regions and sectors
All the regions contribute positively to the aggregate result of the Coincident Barometer in April. The Asia, Pacific and Africa region contributes 6.8 points, or 52%, to the rise in the Coincident Global Barometer, while the Western Hemisphere and Europe contribute 3.9 and 2.4 points, respectively. Despite the still high levels of uncertainty regarding the COVID-19 pandemic, assessment of the present situation is appreciably brighter. The graph in the Press Release illustrates the contribution of each region to the deviation of the Coincident Barometer from the historical average of 100 points.
All five sectors identified contribute positively to the aggregate result. The largest contributions come from the set of variables reflecting the aggregated development of economies (Overall Economic Development), followed by Industry. This is the first time since 2017 that all five subindicators are above the level of 100 points (long-run neutrality).
Leading Barometer – indicators of regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. Like the Coincident Barometer, in April 2021, the leading indicators of the three regions each contribute positively to the 9.2-point rise in the Leading Global Barometer. The Asia, Pacific and Africa contributes 4.7 points, Europe 2.5 points, and, after negatively influencing the aggregate result in the two previous months, the Western Hemisphere contributes 2.0 points.
All the Leading Barometer sectors increase in April, influenced by the continuity of vaccination campaigns around the world and the possibility of the economy returning to a situation of normality. With the results, all five sectors record levels above 120 points, reflecting a highly optimistic economic outlook regarding the near future. Construction and Trade are the most optimistic sectors. After the big blow to the Services sector, this is the first time that the sector has, globally, recovered the losses incurred between March and May of last year, advancing to a higher level than that of Industry.
In April, all five identified sectors contribute positively to the aggregate result of the Leading Barometer, with Trade and Industry contributing more than 2.0 points. The other sectors contribute over 1.5 points each to the aggregate result.