The composite leading indicators (CLI) of the Organisation for Economic Co-operation and Development (OECD) continued to slide to new lows for most countries, but for those looking for more green shoots of recovery, there are the first tentative signs of improvement. Although still far away from an expansion, the February CLIs for France and Italy have shown a recovery. For instance, the CLI for Italy has improved from 96.3 in January to 96.7 while that for France has improved from 96.3 to 96.4. The growth cycle phases of the CLI are defined as follows: expansion (increase above 100), downturn (decrease above 100), slowdown (decrease below 100), recovery (increase below 100). The CLI is supposed to predict turning points six months in advance.
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Also, the pace of the downturn has slackened somewhat for almost all the economies. While China’s CLI declined by 1.1 points in January, the fall was 0.7 in February. India’s CLI, which had also declined by 1.1 points in January, fell by 0.8 points in February. For the US, the CLI had declined by 1.4 points in January and 1.1 points in February. As the OECD press release put it, “Although some tentative signs of improvement in the rate of deterioration in the outlook are appearing in some countries, noticeably Italy, France and in some of the smaller OECD countries, the emphasis on “tentative” cannot be overstated.”
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