Global Barometers decline more sharply in March, partly reflecting the normalization process of the world economy in early 2022.
But the departure of the leading indicator from the historical average level of 100 points, an index that gives a cyclical signal about six months ahead of real economic developments, could be a first sign of the possibility of a stronger deceleration in the coming months than previously. Preview.
The information is from the Brazilian Institute of Economics (Ibre) of the Getulio Vargas Foundation (FGV).
The Background Global Economic Barometer drops 2.7 points to 96.4 points, the lowest level since July 2020 (80.8 points).
The Global Coincident Economic Barometer, which reflects the current state of economic activity, dropped 3.3 points in March to 103.9 points, the lowest level since March last year (100.9 points).
“The result of both Barometers was strongly influenced by the Asia Pacific & Africa region. The data on which the Barometers are based so far is mainly related to the pre-war period in Ukraine. Therefore, this war and the new economic escalation, including price increases for energy and commodities, must have only influenced current results to a very limited extent”, informs Ibre of the FGV.
The result of a collaboration between the Swiss Economic Institute KOF of ETH Zurich, Switzerland, and FGV Ibre, the Barometers already identified high prices with the end of social isolation, brought about by the Covid-19 pandemic.
With war, this perception must be even higher.
“The immediate impact of the conflict in Ukraine has already been felt in additional price increases for the main commodities, significantly raising uncertainty about the evolution of economic activity across all sectors and regions.” FGV.
According to FGV, in March, the Asia, Pacific & Africa region contributed 3 points (or 93%) to the drop in the Global Coincident Barometer. The Western Hemisphere’s indicator contributed with 0.3 point, while that of Europe was stable in the month.
The indicator for this region, in the range of 112 points, remains the highest among the three regions.
Four of the five coincident sectorial indicators fell in the month, with emphasis on Industry and Construction, which dropped almost 7 points at the margin. In the opposite direction, the Trade indicator registers the highest increase since May 2021.
As a result, the indicator is above 117 points and has the highest level among sectorial indicators.
The Global Background Barometer anticipates the cycles of world growth rates by three to six months. The Asia, Pacific & Africa region is the only one to contribute negatively to the evolution of the Leading Barometer in March 2022, with -4.1 points.
The Western Hemisphere contributed positively with 0.9 point, followed by Europe with 0.5 point.
In March 2022, there was a decline in all sectoral leading indicators, except for Industry.
Construction records the lowest level since July 2020 (77.9 points), while the Services sector is at the opposite extreme, with an indicator above 100 points.
Source: CNN Brasil
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