Brazil's Leading Economic Index Rises 0.9% in September, Reversing Previous Decline

Leading Economic Index Shows September Rebound

The Conference Board Leading Economic Index® (LEI) for Brazil, developed in collaboration with Fundação Getulio Vargas (FGV), recorded a notable increase of 0.9% in September 2025. This rise brings the index to 120.1 (2016=100), effectively reversing a 0.9% decline observed in August and marking an end to three consecutive months of decreases.

According to Malala Lin, Economic Research Associate at The Conference Board, 'The Brazil LEI increased in September after three consecutive months of declines.' This positive movement was primarily driven by favorable contributions from 6 of the 8 components that constitute the index.

Contributing Factors and Underlying Trends

A significant positive influence on the September LEI was the Terms of Trade Index. However, the Exports Volume Index contributed negatively, highlighting a complex trade environment for Brazil. This dichotomy is attributed to factors such as US tariff hikes impacting export volumes to the United States, while simultaneously, increased prices for key commodities like coffee and beef bolstered the terms of trade.

Despite the monthly gain, the broader economic outlook suggests continued challenges. The LEI slightly contracted by 0.1% over the six-month period between March and September 2025. While this represents an improvement from the more substantial 2.6% contraction seen in the preceding six-month period (September 2024 to March 2025), the annual growth rate for the index remains negative. This indicates 'persistent headwinds and potentially slower growth going forward,' as noted by The Conference Board.

Coincident Index and Economic Projections

In parallel, The Conference Board Coincident Economic Index® (CEI) for Brazil, also produced with Fundação Getulio Vargas, saw an increase of 0.2% in September 2025, reaching 115.2 (2016=100). This follows a 0.1% increase in August, with the CEI expanding by 0.2% over the six-month period from March to September 2025.

The LEI is designed to provide an early indication of significant turning points in the business cycle, typically anticipating economic shifts by approximately six months. Looking ahead, The Conference Board projects that Brazil's real GDP will continue to slow in the latter half of 2025, with an estimated annual growth of around 2.5% for the year and under 2% in 2026.

Key Components of the LEI

The eight components that comprise the Conference Board Leading Economic Index® for Brazil are:

• Swap Rate - 1 year
• Ibovespa, Bovespa Index
• Manufacturing Survey, Expectations Index
• Services Sector Survey, Expectations Index
• Consumers Survey, Expectations Index
• Terms of Trade, Index
• Physical Production, Durables Consumer Goods, Index
• Exports, Quantum, Index