RIO DE JANEIRO, BRAZIL – The Organization for Economic Cooperation and Development’s (OECD) composite advanced indicators for August point to a moderation trend in economic growth in developed countries. Brazil appears as the only large economy with a “growth slowdown” trend.
These indicators are designed to anticipate turning points in economic activity relative to the trend. The August results confirm what certain economists have warned about: the delta variant seems to be sowing the seeds of doubt. That is, growth remains at above-trend levels in the US and the eurozone but is moderating.
Four cyclical phases are defined in the OECD indicators. In the expansion, the indicator rises and stays above 100; in the turnaround, the indicator falls but is still above 100; in the slowdown, it falls below 100; and in the recovery, the indicator rises but is still below 100.
Among the major OECD economies, the signs of moderate growth at above-trend levels noted in last month’s assessment were confirmed in Canada, the euro area as a whole, including Germany and Italy, and the United Kingdom. In France, indicators point to a moderation in the pace of growth and remain below trend levels. In contrast, in the United States and Japan, they now point to stable above-trend growth.
The OECD mechanism identifies a steady increase in growth above-trend levels for Russia and China among the major emerging economies. In the case of India, it remains below trend (98.4) but continues to signal steady growth.
In the case of Brazil, however, the indicators pointed to 103.1 points in March, fell to 102.8 in April, in June were at 102.3, and in August at 102. It means that Brazilian growth continues but at a slower pace.