Only 3 of the 10 variables that comprise it showed positive variations. The odds of a recession have skyrocketed in recent months.
The indicators that indicate that the economy entered a recession are added. The Torcuato Di Tella University published the data of Leading Index corresponding to September. The indicator, designed to anticipate trend changes in the economic cycle, fell 0.85% in its seasonally adjusted measurement compared to the previous month.
Besides, This is the sixth consecutive fall in the trend-cycle series, which fell 0.97%. This negative sequence suggests that the economy is going through a deceleration phase with a high probability of leading to recession in the coming months.
In the year-on-year comparison, the Leading Index showed a contraction of 1.52% compared to September 2024 in its seasonally adjusted version, while the cycle trend practically remained stable with a drop of just 0.01%.
Variables get worse
The panorama becomes more worrying when analyzing the Diffusion Index (ID)which stood at 30%. This means that Only three of the ten series that make up the Leader Index presented significant positive variations: the Consumer Confidence Index, cement shipments and the Non-metallic Mineral Price Index.
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The remaining seven series are composed of the General Stock Market Indexhe Mervalthe monetary aggregate M1, the FOB price of soybeanscar sales to dealers, VAT collection and the industrial production index of the steel industry.
In this sense, the chance that the economy will emerge from the expansionary phase during the next few months reached 98.01%just below the 98.61% in August, but at a level that leaves practically no room for optimismespecially if you take into account that two months earlier, the probability was only 56.16%.
Recession indicators add up
Other high-frequency indicators also showed a similar result. In the third quarter of the year, the economic activity of the province of Buenos Aires marked an average retraction of 1.8% compared to the previous quarter, according to the latest data from the PulsePBA index.
In this sense, although September data showed a rebound of 1.5% in the Buenos Aires indicator compared to August, failed to offset the 2% decline in said month and four consecutive months of decline.
A similar scenario was observed in private consumption, which rose 2.4% monthly in Septemberbut that did not manage to recover -3.2% from the previous month, according to the index the Business Faculty of the University of Palermo (UP).
Source: Ambito
