In September 2022, the two Global Economic Barometers get closer after having departed from each other between February and August of this year. The Coincident Global Economic Barometer falls 0.6 points to 87.9 points and the Leading Global Economic Barometer climbs 4.8 points for the month to 86.4 points. The drop in the Coincident indicator is determined by the Asia, Pacific & Africa and Europe regions while the increase in the Leading Barometer is concentrated in the Asia, Pacific & Africa region.
“While the Western Hemisphere showed stability on the Coincident Barometer in September, the other regions had negative variations, leading to the observed drop in the Coincident Global Economic Barometer for the period. In turn, the Asia, Pacific & Africa region was the only one to record an advance on the Leading Barometer, while the European result was negative in a situation marked by persistent high-level inflation, climate problems, and uncertainties regarding the supply of energy due to the war in Ukraine. In this context, the Leading Barometer signals a significant increase in the chance of reversing the economic cycle in the region, in addition to a probable slowdown in activity in the other regions”, evaluates Paulo Picchetti, researcher of FGV IBRE
Coincident Barometer – regions and sectors
In September, the Asia, Pacific & Africa and Europe regions each contribute -0.3 points to the fall, while the indicator for the Western Hemisphere remains stable. The continued tendency towards a decrease in the global indicator is partly caused by the supply restrictions related to the war in Eastern Europe and the economic slowdown in Asia, especially in China, which returned to intensifying restrictions on mobility as an auxiliary measure in the combat against the COVID-19 outbreak. The graph from the press release illustrates the contribution of each region to the deviation of the Coincident Barometer from the historical mean of 100 points.
Among the coincident sector indicators, Services, Industry, and Trade decrease this month, while Construction and the indicator for the general state of the Economy (aggregated business and consumer evaluations) move in the opposite direction. With this result, the indicator for the general state of the Economy sustains the highest level among the sectors for the second consecutive month and Construction reduces the distance to the other sectors.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average. In September, the global indicator increases 4.8 points to 86.4 points, recovering the 4.3-point loss of the previous month. The Asia, Pacific & Africa region is the only region to contribute positively to the rise in the indicator, with 5.1 points, while Europe and the Western Hemisphere continue to move in the opposite direction, with contributions of -0.2 and –0.1 points, respectively. The Leading indicator has been fluctuating over recent months, suggesting that global growth expectations for 2022 have been encountering obstacles to the recovery of sustainable growth, such as the continuing conflict between Ukraine and Russia and the adoption of more restrictive monetary policies in various countries. Said factors have contributed to maintaining the global indicator in the adverse region.
Except for Trade, all the Leading indicator sectors rise this month. Despite the improvement, all the indicators remain far below the historical mean of 100 points, with emphasis on the negative perspectives of the Services sector, whose indicator is now 18.8 points below the neutral level. With a value of 9.6 points below average, the indicator for the general state of the Economy (aggregated business and consumer evaluations) records the highest level among the sectors for the first time since March 2021.