The levels of the Global Barometers remained almost unchanged in April, halting the recovery tendency observed earlier this year. The result was mainly influenced by the Asia, Pacific & Africa region, where the indicators retreated after two noticeably rises.
In April 2023, the Coincident Global Economic Barometer falls by 0.5 point to 85.2 points, and the Leading Global Economic Barometer drops by 1.1 point to 94.5 points. The stabilization is mainly due to the drop of the indicators in the Asia, Pacific & Africa region. There was also a decline in the Western Hemisphere, while Europe moved in the opposite direction.
“The results for the global barometers in April reflect the continuity of the main challenges on the world economic development, the worsening of geopolitical tensions and the resilience of the inflationary process. Although the most acute phase of supply problems as a result of health restrictions and armed conflict has been resolved for now, the disinflation process in the main world economies still demands restrictive policies, generating expectations of a slowdown in world economic activity in the coming months”, evaluates Paulo Picchetti, researcher of FGV IBRE.
Coincident Barometer – regions and sectors.
In April, the Asia, Pacific & Africa region and the Western Hemisphere contribute -1.3 and -0.3 points, respectively, to the drop in the Coincident indicator, while Europe contributes positively with 1.1 points. The relative stability of the global indicator this month was partly motivated by the recent volatility of the indicators in China, which had been rising after the end of the zero-Covid policy. The graph below illustrates the contribution of each region to the deviation of the Coincident Barometer from its historical average of 100 points.
The Coincident sector indicators for Services, Industry, and the general state of the Economy (aggregated business and consumer evaluations) decrease this month, while Construction and Trade move in the opposite direction. The outstanding result of an increase of 14.8 points in the indicator for Construction markedly reduces the gap with the other sectors.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by an average of three to six months. The regional results of the Leading indicator follow the same tendency as that of the Coincident Barometer, with the Asia, Pacific & Africa region and the Western Hemisphere contributing negatively with -2.3 points and -0.2 point, respectively, to the overall decline of 1.1 points, while Europe makes a positive contribution of 1.4 points.
All the Leading indicator sectors decrease in April, except Construction, which increases for the third month in a row, accumulating almost 13 points. Despite the increase, the sector continues at the lowest level among the five surveyed sectors.