India Economy: OECD preliminary outlook

Monday, December 08, 2008

(click on image for clearer picture)
The above table is the composite leading indicator of economies compiled by the OECD.  Every economy, expect Brazil, has a 'strong slowdown' growth outlook.  The economic data in November and so far in December has been significantly worse than forecast...expect the above table to paint an even bleaker picture in the coming months the 'slowdown' could become 'downturn'.
In response to this, the Indian policy makers have provided a papered stimulus package.  Obviously, they are puting all their hopes on the monetary side and expecting the RBI moves will be sufficient to stabilize the slide and re-ignite growth.
The RBI, in their commentary on the policy rate cuts announced on Friday, have clearly said that the monetary stimulus will not be sufficent; a significant fiscal stimulus is needed.
Let us wait and watch..perhaps there will be more steps on the fiscal stimulus front.

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