The Global Barometers record a small increase in October, largely offsetting the previous month’s decline. The Coincident Barometer continues to signal economic development below the medium-term average, while the leading barometer continues to point to a normalisation of growth in the coming months.
The Coincident Global Economic Barometer increases by 2.1 points in October, to reach 93.8 points, while the Leading Barometer gains 1.9 points, to 102.5 points. The rise in both indicators is mainly driven by the results of the Asia, Pacific & Africa region.
“The stabilization of the Global Barometers in narrow bands of variation since April reflects moderate growth of the world economy and is marked by strong heterogeneity in performance between countries. In the United States, monetary policy is in a phase of slowly loosening, with the economic slowdown possibly extending for longer than foreseen. In Europe, a slowdown is expected over the coming months, while the Asia-Pacific region should maintain growth above the global average, although China remains a factor of uncertainty. Among the visible risks, the possible expansion of the conflict in the Middle East to other countries in the region may put pressure on inflation at a time when rates are approaching pre-pandemic levels”, evaluates Aloisio Campelo Jr., researcher of FGV IBRE.
Coincident Barometer – regions and sectors
The gain in the Coincident Barometer in October is the result of a 2.2-point positive contribution of the coincident indicator for the Asia, Pacific & Africa region, while Europe remains stable, and the Western Hemisphere contributes slightly negatively with -0.1 points. After losing ground between February and July of this year, the indicator for the Asia, Pacific & Africa region has stopped falling, and now fluctuates between 88 and 92 points, signalling the difficulty of the region to regain the increasing tendency observed in 2023.
All the Coincident sector indicators increase in October, with Construction standing out. Economy (aggregated business and consumer evaluations) remains at the lowest level among the sector indicators.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. In October, the Asia, Pacific & Africa region and the Western Hemisphere contribute positively to the aggregate result with 1.7 and 0.4 points, respectively, while Europe contributes in the opposite direction with -0.2 points.
In October, all the Leading sector indicators increase, with Construction standing out for a gain of over 10 points, reaching a level that reflects a positive outlook.