The Leading Economic Index (LEI) for Brazil, released by FGV’s Brazilian Institute of Economics (IBRE) and The Conference Board (TCB), dropped 1.6% in September, down to 113.8 points. Six of the eight series retreated in the month. The Industry Expectations Index (IE) and the Terms of Trade gave the largest negative contributions.  The Brazilian Coincident Economic Index (CEI), which measures current economic conditions, dropped 1.4% in the same period, down to 102.2 points.

“The drop in the September CEI continues the trend of volatility surrounding stagnation that has been characteristic of the last few months. In a context where the political scenario still contaminates economic expectations, the LEI’s accumulated fall in six months increased, indicating the low probability of an increase in the pace of economic activity in the coming months”, said Paulo Picchetti (IBRE).

The Leading Economic Index comprises eight economic categories to gauge Brazil’s economic activity. Each of them has been individually proven to effectively anticipate economic trends. The aggregation of individual indicators into a composite index filters out the so-called “noise”, contributing to reveal the effective economic trend.

The Brazilian Leading Economic Index (LEI) was launched in July 2013 by FGV’s IBRE and The Conference Board. With a series dating back to 1996, the LEI would have reliably anticipated all four of the recessions identified by IBRE’s Economic Cycles Dating Committee (CODACE) during this period. The indicator allows a direct comparison between Brazil’s economic cycles and those of 11 other countries and regions already covered by The Conference Board: China, United States, Eurozone, Australia, France, Germany, Japan, Mexico, Korea, Spain, and United Kingdom.

The complete study is available on the website.