The CEIC Leading Indicator is a proprietary dataset designed by CEIC Insights to precede the development of major macroeconomic indicators and predict the turning points of the economic cycle for key markets. It is a composite leading indicator that is calculated by aggregating and weighting selected leading indicators covering various important sectors of the economy, such as financial markets, the monetary sector, labour market, trade and industry. It is developed through a proprietary CEIC methodology and employs data from the CEIC database. The CEIC Leading Indicator currently covers eight regions – Brazil, China, India, Indonesia, Russia, the Euro Area, Japan and the United States.

The Brazilian economy may grow above the long-term trend between Q4 2021 and Q1 2022, according to the CEIC Leading Indicator, which anticipates turning points of the business cycle. The indicator rose for the second straight month, to 102.3 in June, above the threshold of 100. Many face-to-face activities in the services sector may rebound in the second half of 2021, as the number of vaccinated people in the country has been steadily rising. As of July 4, 36% of the Brazilian population have received their first jab and 12.7% were fully vaccinated.  

Some key variables supported the performance of the CEIC Leading Indicator in June. The manufacturing confidence indicator rose to 7.6% in the month from 4.2% in May, reflecting the recovery in the world’s main economies, which may have a positive impact on Brazilian exports. The construction industry remains robust, as the expectation to purchase inputs index increased to 56.6 in June from 54.9 in May 2021. The consumer inflation expectation indicator recorded its fifth increase in a row to 6.1 in June, supported by higher prices of electricity and fuels. The international crude oil prices rose further to a monthly average of USD 71.9 per barrel in June from USD 66.9 per barrel in May. In the stock markets, the equity market index inched up to 126,801 in the end of June, from 126,216 in the end of May, amid uncertainties regarding the country’s tax reform and the economic impact of the new strains of the COVID-19.

In the long run, however, Brazil’s economic growth may remain subdued, as the smoothed CEIC Leading Indicator was 100.8 in June, a 0.4 pp decrease compared to May. The central bank may continue to reduce monetary stimulus throughout the year in response to the growing inflation. In addition, political uncertainties may also have some negative impact on Brazil’s economic performance after the second half of 2021, as the country will have elections in 2022.

Keep informed each month on the predicted turning points of the economic cycle for key markets with our free, proprietary CEIC Leading Indicator. Learn more and register here