Leading Indicator retreats in November

Leading Indicator retreats in November

The Leading Economic Index for Brazil (LEI), published by FGV IBRE in partnership with The Conference Board (TCB), decreased 0.1 percent to 123.3 (2016=100), after six consecutive month to month increases. Of the eight components that comprise the index, six contributed negatively. The largest negative contribution came from the Services Expectations Index, which declined by 4.6 percent.

The Coincident Economic Index for Brazil (CEI) (FGV IBRE / TCB), which measures current economic conditions, fell by 0.1 percent to 101.8 (2016=100) in the same period. 

The slight decline in the CEI reflects a deceleration in the rate of the economic recovery at year-end. The decline in the LEI was prompted by negative expectations brought about by the resurgence of the pandemic and the end of stimulus measures”, states Paulo Picchetti of FGV IBRE. “Despite the beginning of the immunization process against the, the LEIs suggests we are very unlikely to see a more robust rate of recovery in the Brazilian economy in early 2021”, says 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.