Global Barometers continue to rise

The Global Barometers rise for the second consecutive month in March 2023, fueled by the favorable evolution in the economic environment of the Asia, Pacific & Africa region.

In March 2023, the Coincident Global Economic Barometer rises 2.6 points to 85.9 points, the highest level since October 2022 (90.0 pts.). The Leading Global Economic Barometer climbs 5.4 points to 95.6 points, the highest level since February 2022 (97.4 pts.). The increase in the aggregate indicators in March was driven exclusively by the advance in the Asia, Pacific & Africa region, while the other regions remain stable or decline.

“The favorable result in the Global Barometers in March mainly reflects the recovery in the level of activities in China after relaxing the policy combatting the pandemic. In global terms, this distance from the worst moment of the health crises has accelerated the recovery of the services sector, resulting in pressures on the labor market, reinforcing the risk of inflationary pressures. The response of the monetary authorities of the main global economies to these pressures, added to the uncertainties resulting from the absence of an outcome to the conflict in Europe, may be obstacles to a stronger recovery in the barometers over the coming months”, evaluates Paulo Picchetti, researcher of FGV IBRE.

Coincident Barometer – regions and sectors

In March, the Asia, Pacific & Africa region contributes 2.9 points to the 2.6-point increase in the Coincident indicator, while Europe makes a negative contribution of 0.3 points and the Western Hemisphere has a null contribution. The rise in the regional indicator for the Asia, Pacific & Africa region continues to reflect the reopening of the Chinese economy, with the end of the Covid zero policy and the recovery in growth. The graph below 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 increase in March 2023 except Construction, which moves in the opposite direction and drops further behind the other sectors. The distance between the Construction indicator and that of the Services sector, the highest difference at the present time, now exceeds 25 points.

Leading Barometer – regions and sectors  

The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. The result of the Leading indicator follows the same tendency as that of the Coincident Barometer, with the Asia, Pacific & Africa region contributing positively with 6.9 points to the 5.4-point rise in the indicator, while Europe makes a negative contribution of -1.5 points and the Western Hemisphere remains stable for the month. This is the second positive contribution of a high level from the Asian region, while this month’s result for Europe is the first negative contribution since September 2022.

All the Leading indicator sectors increase in March, with Trade and the indicator for the general state of the Economy (aggregated business and consumer evaluations) standing out with rises of 11.0 and 9.5 points, respectively. As in the case of the Coincident indicator, Construction has the lowest level among the sectors.