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The Conference Board Leading Economic Index® for Brazil, Together with Fundacao Getulio Vargas, Fell in May

The Conference Board Leading Economic Index® for Brazil, together with Fundacao Getulio Vargas (TCB/FGV Brazil LEI), decreased 1.5 percent in May. The index now stands at 121.7 (2004 = 100), following a 0.4 percent decline in both April and March. Two of the eight components contributed positively to the index in May.

"Increasingly deteriorating business and consumer expectations as well as economic and political uncertainties leading up to the World Cup events have been taking a toll on the Leading Economic Index (LEI) for Brazil," said Paulo Picchetti, Economist at FGV/IBRE. "Although employment and consumption are still holding up and the external sector improved in May, the persistent weakness in the LEI and the Coincident Economic Index point to a very sluggish pace of economic activity with increased volatility in the second half of the year."

Ataman Ozyildirim, Economist at The Conference Board, added, "The LEI for Brazil sharply declined in May, following more moderate declines in the previous four months. Persistent and widespread weaknesses among the leading indicators have now pushed the six-month growth rate of the LEI more deeply into negative territory. The deterioration in the LEI points to continued below-trend growth for 2014, which is likely to drop further from 2013 to the range of 1.5 percent to 2.0 percent."

The Conference Board Coincident Economic Index® for Brazil, together with Fundacao Getulio Vargas (TCB/FGV Brazil CEI), which measures current economic activity, was unchanged in May at 128.6 (2004 = 100), following a 0.1 percent increase in April and a 0.5 decline in March. Three of the six components contributed positively to the index in May.

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.

www.conference-board.org

 

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