May 16, 2014, 10:15:00 AM EDT
2014 /PRNewswire/ — The Conference Board Leading Economic Index(R) for Brazil, together with Fundacao Getulio Vargas (TCB/FGV Brazil LEI), decreased 0.4 percent in April. The index now stands at 123.7 (2004 = 100), following a 0.3 percent decline in March and a 0.6 percent decline in February. Four of the eight components contributed positively to the index in April.
“A more favorable external scenario helped stock prices and the trade balance in April, but this modest improvement wasn’t enough to overcome the increasing pessimism of entrepreneurs from the industrial and services sectors, and of consumers facing inflationary pressure,” said Paulo Picchetti, Economist at FGV/IBRE. “Overall, the LEI continues to suggest that Brazil’s bleak economic situation is unlikely to improve in the upcoming months.”
Ataman Ozyildirim, Economist at The Conference Board, added, “April’s decline in the LEI for Brazil, the fourth consecutive drop, pushes the six month growth rate deeper into negative territory and increases the likelihood that economic activity will decelerate in the near term. Continued deterioration in business and consumer sentiment and political uncertainty remain obstacles to an already struggling Brazilian economy.”
The Conference Board Coincident Economic Index(R) for Brazil, together with Fundacao Getulio Vargas (TCB/FGV Brazil CEI), which measures current economic activity, increased 0.1 percent in April to 128.8 (2004 = 100), following a 0.2 percent decline in both March and February. Four of the six components contributed positively to the index in April.
TCB/FGV Brazil LEI aggregates eight economic indicators that measure economic activity in Brazil. Each of the LEI components has proven accurate on its own. Aggregating individual indicators into a composite index filters out so- called “noise” to show underlying trends more clearly.
About The Conference Board Leading Economic Index(R) for Brazil, together with Fundacao Getulio Vargas
TCB/FGV Brazil LEI was launched in July 2013. Plotted back to 1996, this index has successfully signaled turning points in the economic cycles of Brazil. The Conference Board also produces LEIs for Australia, China, the Euro Area, France, Germany, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States.
The eight components of TCB/FGV Brazil LEI include:
Swap Rate, 1 year (Source: Central Bank of Brazil)
Stock Price Bovespa Index (Source: BOVESPA – Bolsa de Valores de Sao Paulo/ Sao Paulo Stock Exchange)
Manufacturing Survey: Expectations Index (Source: FGV/IBRE)
Services Sector Survey: Expectations Index (Source: FGV/IBRE)
Consumer Expectations Survey: Expectations Index (Source: FGV/IBRE)
Physical Production of Durables Consumer Goods Index (Source: IBGE – Instituto Brasilieiro de Geografia e Estatística/ Brazilian Institute of Geography and Statistics)
Terms of Trade Index (Source: FUNCEX – Fundacao Centro de Estudos do Comercio Exterior/The Foundation Center for the Study of Foreign Trade)
Exports Volume Index (Source: FUNCEX – Fundacao Centro de Estudos do Comercio Exterior/The Foundation Center for the Study of Foreign Trade)
To view The Conference Board calendar of 2014 indicator releases:
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The Brazilian Institute of Economics (Instituto Brasilieiro de Economia–IBRE) at Fundacao Getulio Vargas (FGV) was founded in 1951 to research, analyse, produce and disseminate macroeconomic statistics and applied studies. Its purpose is to inform and help improve public policies and private activities in the Brazilian economy. IBRE is a leading institute in calculating the Brazilian GDP and producing price indices including the General Price Index (IGP) which served as Brazil’s official inflation index for many years. In addition to price indices, IBRE prepares trend and business cycle indicators that are widely used by administrators and analysts.
Summary Table of Composite Economic Indexes 2014 6-month Feb Mar Apr Oct to Apr Leading Economic Index 124.6 r 124.2 r123.7 p Percent Change -0.6 -0.3 r -0.4 p -2.2 Diffusion 25.0 18.8 37.5 0.0 Coincident Economic Index 129.0 r 128.7 p128.8 p Percent Change -0.2 r -0.2 p 0.1 p -0.2 Diffusion 41.7 41.7 83.3 58.3 n.a. Not available p Preliminary r Revised Indexes equal 100 in 2004 Sources: The Conference Board, FGV/IBRE All Rights Reserved