After falling for most of the second half of 2021, the Global Economic Barometers, indicators that allow the analysis of world economic development, rise for the second consecutive month, reported today (10) the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV) . The Coincident Barometer remains above the historical average, while the Antecedents Barometer returns to the neutral 100-point range.
The Coincident Global Economic Barometer rose 0.4 points in January, to 108.7 points, while the Previous Global Economic Barometer advanced 3.6 points, to 100.9 points, the highest level since September 2021 (108.1 points).
According to the Ibre/FGV, both results were heavily influenced by the improvement in the economic environment in the Asia, Pacific and Africa region.
While the Coincident Barometer reflects the current state of economic activity, the Antecedents Barometer gives a cyclical signal about six months ahead of actual economic developments. These indicators are based on the results of economic trends surveys conducted in more than 50 countries. The intention is to have the widest possible global coverage.
According to Ibre/FGV researcher Paulo Picchetti, the effects of the new wave of the covid-19 pandemic and the perspective of more restrictive monetary policies on expectations regarding the level of economic activity seem to have already been mostly incorporated in the last months of 2021.
“At the beginning of 2022, global barometers signal a trajectory of adaptation to this new scenario, reversing the downward trend observed in the last months of the previous year”, said, in a note, Paulo Picchetti.
Coincident Barometer
The Asia, Pacific and Africa region contributed 1.3 points to the increase in the Global Coincident Barometer. Europe, in turn, went in the opposite direction and contributed negatively with 1 point to the aggregate result. Despite the setback, the regional indicator for Europe still holds the highest level among the three regions, with the indicator in the range of 112 points.
Among the sectorial indicators, only Industry rose in January, while the others continue to signal deceleration in the level of activity. All sectors remain in the favorable zone, and the Industry indicator became the highest among them, which had not occurred since October 2021.
Background Barometer
As in the Coincident Barometer, the Asia, Pacific and Africa region exerted the greatest contribution to the evolution of the Antecedents Barometer in January 2022, with 3.2 points. Europe also contributed positively, with 0.7 point.
The Western Hemisphere indicator contributed negatively, with 0.3 points, closing the month 10 points below the neutrality level of 100 points. According to the Ibre/FGV, the result reflects the increased risks to growth associated with the advancement of the new Ômicron variant of covid-19 in the region and the cyclical slowdown expected in countries like Brazil.
There was an increase in two of the five leading sectoral indicators in January: Industry and Services. The other indicators dropped in the month. As a result, the General Economy indicator (assessments by consumers and business aggregates) closed the month below 90 points and 20 points below the indicator for the Services sector, the most optimistic.
“The result signals, on the one hand, the detachment between the perceptions of companies and consumers, and on the other, the still favorable evolution of the face-to-face service segments, which suffered the most in times of greater restriction to mobility during the covidence pandemic. 19”, explains the Ibre/FGV.
