The Leading Economic Index® for Brazil, released by FGV IBRE in partnership with The Conference Board (TCB), decreased by 0.1 percent in April, to 116.6 points. Two of the eight components contributed to last month’s drop, with the largest negative contribution coming from the Consumer Expectations Index, which decreased 2.7 percent.
The Coincident Economic Index (CEI) for Brazil, which measures current economic conditions, decreased 0.1 percent in April, to 102.5 points.
“The most recent monthly declines in the LEI and CEI reflect the somewhat tentative outlook for the recovery in GDP growth for the rest of the year,” according to Paulo Picchetti at FGV IBRE. “The likelihood of a reversal of the economic cycle is more than ever conditional on approval of proposed government reforms in the coming months”, said Picchetti.
The Leading Economic Index aggregates eight economic components that measure economic activity in Brazil. Each of them individually has proved efficient in anticipating economic trends. Aggregating individual indicators into a composite index filters out the so-called "noise," contributing to the effective economic trend to be revealed.
About the Leading Economic Index (LEI)
FGV IBRE and The Conference Board launched the Leading Economic Index (LEI) for Brazil in July 2013. With a series dating back to 1996, the LEI would have anticipated, reliably, all four recessions identified by the Brazilian Dating Committee of Economic Cycles (CODACE) during this period. This indicator allows Brazil to directly compare its business cycles with 11 other countries and regions already covered by The Conference Board: China, the United States, the Eurozone, Australia, France, Germany, Japan, Mexico, Korea, Spain and the UK.
The eight components of the Brazilian LEI are:
Pre-fixed DI swap reference rate – 1 year (Source: Brazil's Central Bank)
Ibovespa Stock Market Index (Source: BOVESPA - São Paulo Stock Exchange)
Expectations index of the Manufacturing Survey (Source: FGV IBRE)
Expectations index of the Services Survey (Source: FGV IBRE)
Expectations index of the Consumer Survey (Source: FGV IBRE)
Durable consumer goods - physical production index (Source: IBGE)
Terms of trade index (Source: FUNCEX)
Volume of Exports index (Source: FUNCEX)
ABOUT THE CONFERENCE BOARD
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org
ABOUT FGV IBRE
Created in 1944, FGV is a Brazilian private higher education institution, think tank and producer of statistics, with a mission "to foster Brazil’s socioeconomic development." The Brazilian Institute of Economics (IBRE) is FGV´s arm with the mission to produce and disseminate high-quality economic statistics and studies that are relevant to improve policies and private action in Brazil. www.fgv.br/ibre