The Brazilian Leading Economic Index (IACE), published jointly by the FGV´s Brazilian Institute of Economics (FGV IBRE) and The Conference Board (TCB), fell 4.7% in March to 114.5 points – the biggest drop since November 2008. The accumulated variation in the last six months was also negative, declining 3.5%. Of the eight component series, six made negative contributions to the result, especially the Service Sector Expectations Index and Bovespa Index, which sank 18.3% and 29.9% at the margin, respectively.

The Brazilian Coincident Economic Index (ICCE), which measures current economic conditions, fell 0.2% to 105.0 points over the same period. The accumulated variation in the last six months was positive, rising 0.8%.

“The pandemic’s negative effects on the level of activities already appeared in March’s ICCE result,” said FGV IBRE’s Paulo Picchetti. “In turn, the IACE result in this period indicates a significant increase in the probability of recession in the next few months.”

The Brazilian Leading Economic Index combines eight economic components that measure economic activity in Brazil. Each one of them has been individually efficient at anticipating economic trends. These individual indicators are aggregated in a composite index to filter out “noise,” helping to clearly reveal economic trends.

The complete study is available here.