India's growth remains stable while most other economies lose momentum: OECD report

The CLI is designed to provide early signals of turning points in business cycles showing fluctuation of the economic activity around its long-term potential level. It is compiled based on a range of forward-looking indicators such as order books, confidence indicators, building permits, long-term interest rates, and new car registrations, among others.

OECD, however, cautions that it is seeing a higher amount of fluctuations in its CLI components due to the uncertainties related to the ongoing Russia-Ukraine war.

Among major emerging-market economies, India is anticipated to maintain stable growth. Meanwhile, growth is expected to lose momentum in China and Brazil.

Rampant lockdowns across industrial hubs fuelled by the country’s ‘zero COVID policy' have crippled the Chinese economy and put the country’s target of 5.5 percent growth in 2022 in doubt.

In Brazil, rising inflation, and tighter financial conditions have eroded economic sentiment and purchasing power. Moreover, the upcoming presidential election is adding uncertainty as investments are expected to remain subdued in the country until 2023.

As for India, although the latest CLI signals that the country's growth remains relatively stable, the economy has come off its high. While the country's CLI stood at 100.3 in March, it came down to 100.1 in June.

“After recording the strongest GDP rebound in the G20 in 2021, the Indian economy is progressively losing momentum as inflationary expectations remain elevated due to rising global energy and food prices, monetary policy normalises and global conditions deteriorate,” OECD had earlier said in its Economic Forecast Summary.

Although inflation is expected to gradually decline in India, the surge in energy imports is expected to widen the country’s current account deficit.