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More Information: • RIO DE JANEIRO: FGV/IBRE Agnes Ramos dos Santos +55 21 3799-5462 | [email protected] • NOVA YORK: The Conference Board Jonathan Liu +1 732 991 1754 / [email protected] Carol Courter +1 732 672 2817 / [email protected] • BRUXELAS: The Conference Board Andrew Tank +32 2 675 5405 / [email protected]

For release August 16th 2016, at 11:00 P.M. (Rio de Janeiro time) 10:00 A.M. (New York time)

The Leading Economic Index®, by the Conference Board and FGV/IBRE, advances again in July Rio de Janeiro, August 16th 2016. The Leading Economic Index® for Brazil, released by FGV/IBRE in partnership with The Conference Board, advanced for the sixth consecutive month, to change 1.9% between June and July, reaching 97.8 points (2010 = 100). The result comes after advances by 2.8% in May and 1.9% in June. Among the eight components, four contributed positively to the index in May: Expectations index of Manufacturing, Service and Consumer Surveys; as well as the Ibovespa Stock Index. The Coincident Economic Index (CEI) for Brazil also developed by FGV/IBRE in partnership with TCB, which measures current economic conditions, remained stable between June and July, at 98.1 points (2010 = 100). Considering the data revision in recent months for the indicators that comprise it, the result comes after stability in May and a 0.2% increase in June. “Business and consumer expectations continue to improve and as a result the positive trend in the Brazil LEI has been sustained through July,” said Paulo Picchetti, Economist at FGV/IBRE. “Although the improvement in the LEI signals a possible reversal of the business cycle in the near future, current economic conditions and fundamentals remain fragile”, adds Picchetti.

LEI, by FGV/IBRE and The Conference Board, advances again in July

Note: The shaded areas denote recessions as determined by CODACE. The start date of the current recession (March 2014) was chosen for being the last month of the quarter in which CODACE announced the peak of the last expansion phase of the Brazilian economy.

Annualized half-yearly variations of LEI in positive territory

Note: The shaded areas denote growth cycles defined by deviations from growth trend of the Coincident Economic Index (CEI) + GDP for Brazil, as determined by The Conference Board and FGV/IBRE.

The Leading Economic Index aggregates eight economic components that measure economic activity in Brazil. Each of them individually has proved efficient in anticipating economic trends. Aggregating individual indicators into a composite index filters the so-called "noise," contributing to the effective economic trend to be revealed.

About the Leading Economic Index (LEI)

FGV/IBRE and The Conference Board launched the Leading Economic Index (LEI) for Brazil in July 2013. With a series since 1996, the LEI would have anticipated, reliably, all four recessions identified by the Brazilian Dating Committee of Economic Cycles (CODACE) during this period. This indicator allows Brazil to directly compare its business cycles with 11 other countries and regions already covered by The Conference Board: China, the United States, the Eurozone, Australia, France, Germany, Japan, Mexico, Korea, Spain and the UK. The eight components of the Brazilian LEI are: Pre-fixed DI swap reference rate – 1 year (Source: Brazil's Central Bank) Ibovespa Stock Market Index (Source: BOVESPA - São Paulo Stock Exchange) Expectations index of the Manufacturing Survey (Source: FGV/IBRE) Expectations index of the Services Survey (Source: FGV/IBRE) Expectations index of the Consumer Survey (Source: FGV/IBRE) Durable consumer goods - physical production index (Source: IBGE) Terms of trade index (Source: FUNCEX) Volume of Exports index (Source: FUNCEX) ABOUT THE CONFERENCE BOARD The Conference Board is a global, independent membership for conducting business researches and seminars, working for the public interest. Its mission is to equip the major international companies with practical knowledge needed to improve their performance and better serve society. TCB is a nonprofit organization based in the United States that produces economic indices since 1996, time that it was selected by the US Department of Commerce Bureau of Economic Analysis to take responsibility for the calculation of US leading indicators. The Conference Board expanded its global program since the mid1990s. www.conferenceboard.org ABOUT FGV/IBRE The Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV / IBRE) was founded in 1951 to research, analyze, produce and disseminate macroeconomic statistics and applied studies. Its purpose is to inform and help improve public policies and private activities in the Brazilian economy. FGV/IBRE produces price indices, including the General Price Index (IGP), which served as the official inflation index in Brazil for many years. In addition to price indices, FGV/IBRE produces tendency surveys and indicators of economic cycles, which are widely used by managers and analysts. www.fgv.br/ibre

Summary Table of Composite Economic Indexes 2016 may

LEI Percent Change

jun

94.2

r

2.8

r

6-month Feb to Jul

jul

96.0

r

1.9

r

97.8

p

1.9

p

Diffusion

75.0

CEI

97.9

r

98.1

p

98.1

p

0.0

r

0.2

p

0.0

p

Percent Change Diffusion n.a. Not available

75.0

33.3 p Preliminary

56.3

41.7

66.7

9.0 75.0

-0.5 50.0

r Revised

Indexes equal 100 in 2010 Sources: The Conference Board, FGV/IBRE

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