The Leading Economic Index increased in January

The Leading Economic Index increased in January

The Leading Economic Index® for Brazil, released by FGV IBRE in partnership with The Conference Board, increased 2.9 percent in January, to 118.8. Seven out of the eight components contributed to the last month’s increase, with the largest positive contributions coming from Manufacturing and Services Sector Expectations index. Compared to January last year, the indicator increased by 3.0 percent

The Coincident Economic Index (CEI, FGV TCB) for Brazil, which measures current economic conditions, advanced 0.3 percent in January, to 103.0. Four of the six components contributed to the increase in January.

“The economic recovery continues at a slow pace, as reflected in upward trend of the CEI. Meanwhile, January’s rebound in the LEI was driven by a boost in expectations”, according to Paulo Picchetti at FGV IBRE. “The effective implementation of the proposed reforms in the coming months is essential to ensuring an acceleration in the pace of the recovery”, 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 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 since 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

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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