Leading Economic Index falls in February

Leading Economic Index falls in February

The Leading Economic Index® for Brazil (LEI), published by FGV IBRE in partnership with The Conference Board (TCB), decreased 0.6 percent to 123.0 in February 2021. Of the eight components that comprise the index, five contributed negatively to the aggregate result, with the largest negative contribution coming from the Manufacturing Expectations Index. 

The Coincident Economic Index for Brazil (CEI) (FGV IBRE / TCB), which measures current economic conditions, increased by 0.2 percent to 98.9, in the same period.

The rise in the CEI in February was mainly driven by an an improvement in industrial activity while other sectors are still suffering from the effects of the pandemic’s resurgence in Brazil”, states Paulo Picchetti of FGV IBRE. “However, given the challenges imposed by new restrictions on mobility and limits on economic stimulus policies, the LEI, driven down largely by worsening manufacturing expectations, already suggests there is not likley to be a robust recovery in the foreseeable future.”

The Leading Economic Index aggregates eight components that measure economic activity in Brazil. Each has proved individually efficient in anticipating economic trends. Aggregating individual indicators into a composite index filters out so-called "noise”, smoothing out the volatility of individual components, and revealing the underlying economic trend.