After declining throughout most of the second semester of 2021, the Global Economic Barometers rise in January for the second consecutive month. The Coincident Barometer remains above the historical mean, while the Leading Barometer returns to the neutral range of 100 points.
The Coincident Global Economic Barometer rises 0.4 points in January to 108.7 points, while the Leading Global Economic Barometer increases 3.6 points, to 100.9 points, the highest level since September 2021 (108.1 points). Both results are influenced by the improvement in the economic environment in the Asia, Pacific, and Africa region.
“The effects of the new wave of the pandemic and the prospect of more restrictive monetary policies on expectations regarding the level of economic activity appear to have already been mostly incorporated during the final months of 2021. At the beginning of 2022, the global barometers indicate a trend of adaptation to the new scenario, reversing the trend of decreases observed in the last months of the previous year”, evaluates Paulo Picchetti, researcher of FGV IBRE.
Coincident Barometer – regions and sectors
The Asia, Pacific & Africa region contributes 1.3 points to the increase in the Global Coincident Barometer, while the Western Hemisphere contributes with 0.1 point. Europe, in turn, moves in the opposite direction with a negative contribution of 1.0 point to the aggregate result. Despite the decrease, the regional indicator for Europe remains at the highest level among the three regions (112.4 points). The graph below illustrates the contribution of each region to the deviation of the Coincident Barometer from the historical average of 100 points.
Among the sector indicators, only Industry rises in January, while the other sectors continue to signal a deceleration in the level of activity. All sectors remain in the favorable zone, and the indicator for Industry is the highest among the sector indicators now, which has not been the case since October 2021.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. As with the Coincident Barometer, the Asia, Pacific and Africa region accounts for the largest contribution to the development of the Leading Barometer in January 2022, with 3.2 points. Europe also contributes positively with 0.7 points. However, the indicator for the Western Hemisphere contributes negatively, with -0.3 points, and moves deeper below average, closing the month 10 points below the 100-point neutrality level. The result reflects the increased risk to growth associated with the advance of the Omicron variant of COVID-19 in the region and the cyclical deceleration foreseen in countries like Brazil.
Two of the five sectorial indicators are rising in January: Industry and Services. The other indicators are decreasing. Therefore, the indicator that measures the general state of the Economy (aggregated business and consumer evaluations) ends the month below 90 points, and 20 points below the indicator for the Services sector, which is the most optimistic. On the one hand, the result indicates a divergence between the perceptions of businesses and consumers, and, on the other hand, the continued favorable development of the services sectors dependent on current consumption, exactly those which had most suffered at times of restrictions on mobility during the COVID-19 pandemic.