Leading indicator decreased in March

Leading indicator decreased in March

The Leading Economic Index for Brazil (LEI), published by FGV IBRE in partnership with The Conference Board (TCB), decreased 2.2 percent to 119.9 in March 2021. The cumulated change over the last six months was also negative at 2.0 percent. Of the eight components that comprise the index, four contributed negatively to the aggregate result, with the largest negative contribution coming from the Consumer Expectations Index.

The Coincident Economic Index for Brazil (CEI) (FGV IBRE / TCB), which measures current economic conditions, fell by 0.1 percent to 96.7 in the same period. The cumulated change over the last six months was also negative at 2.2 percent.

The lack of improvement in the CEI for March reflects the negative impact on growth due to the resurgence of the health crisis and the deceleration of personal consumption during the first quarter”, states Paulo Picchetti of FGV IBRE. “The LEI declined in March, driven by deteriorating expectations mainly due to the perceptions that the health crisis and consumer demand will not improve in the near term”, adds Picchetti.

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.