Brazil’s Leading Economic Index retreats in May 2019

Five of the eight components contributed negatively to the evolution of the index in the month, in particular Expectations Index for the Service sector, which retreated by 5.3%.
Economics
18 June 2019
Brazil’s Leading Economic Index retreats in May 2019

Brazil’s Leading Economic Index (LEI), published in partnership between FGV’s Brazilian Institute of Economics (IBRE) and The Conference Board (TCB), fell by 0.9% in May, reaching 116.1 points. Five of the eight components contributed negatively to the evolution of the index in the month, in particular Expectations Index for the Service sector, which retreated by 5.3%. Brazil’s Coincident Economic Index (ICCE), which measures current economic conditions, rose by 0.7% in May, reaching 103.8 points.

“The positive result of the ICCE in May indicates that the Brazilian economy is continuing in its trajectory of slow recovery,” according to Paulo Picchetti of FGV IBRE. “Nevertheless, the strong negative influence of expectations on the IACE result highlights the small likelihood of a significant increase in the pace of the expansion,” said Picchetti.

The Leading Economic Index aggregates eight economic components that measure economic activity in Brazil. Each of them has been individually efficient in anticipating economic trends. The aggregation of the individual indicators into a composite index filters out the so-called “noises,” helping to bring about an effective economic trend.

The full study is available on the website.