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 which 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 CEIC Leading Indicator for Brazil recorded its fifth increase in a row in September, reaching 104.6 and inching closer to pre-COVID levels. In August, the indicator was 101.4 and exceeded the benchmark value of 100, which separates a GDP acceleration prospect from a deceleration one. Most of the sectors continued to rebound in September, indicating that the country's economy is expected to return on a growth path in the first quarter of 2021. The government's cash transfer programs and lower interest rates supported the surge in domestic demand and the increasing economic activity , despite the slow reaction of the labor market. The manufacturing confidence returned to positive terrain in September, recording 6.7, after six months below the zero threshold. Construction companies foresee a rebound of the sector's activity, as the expectation to purchase inputs improved to 55. 6 in September 2020, above the neutral value of 50, and higher than in September 2019 (53.7). Crude oil prices, on the other hand, inched down to USD 41.5 per barrel in September, from USD 45.2 per barrel in August, amid uncertainties surrounding the economic recovery in the US and the EU. On the domestic side, the fiscal stimulus package had a strong impact on the country's public finance, increasing fiscal risks. As a consequence, the equity market index dropped to 94.603 in the end of September from 99.369 in the end of August. the fiscal stimulus package had a strong impact on the country's public finance, increasing fiscal risks. As a consequence, the equity market index dropped to 94.603 in the end of September from 99.369 in the end of August. the fiscal stimulus package had a strong impact on the country's public finance, increasing fiscal risks. As a consequence, the equity market index dropped to 94.603 in the end of September from 99.369 in the end of August.

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The smoothed CEIC Leading Indicator reached 99.7 in September, very close to the neutral value of 100, meaning that the GDP may stabilize in Q1 2021. As of the second quarter of 2021, Brazil may register positive growth rates, supported by a rebound in the labor market and a low base effect. Nevertheless, the GDP value will take some quarters to recover, as the smoothed leading indicator continues to perform well below the pre-pandemic levels. For the rest of 2020, the prospect of recession is still there.

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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