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The Conference Board Leading Economic Index®(LEI) for India decreased by 0.5 percent in March 2023 to 148.3 (2016=100), a reversal from 0.5 percent increase in February. The LEI improved by 0.5 percent in the six-month period from September 2022 to March 2023, much slower than the 4.5 percent growth rate over the previous six months.
The Conference Board Coincident Economic Index® (CEI) for India increased by 1.1 percent in March 2023 to 138.7 (2016=100), following a 0.4 percent increase in February. The CEI fell by 3.0 percent in the six-month period from September 2022 to March 2023, nearly offsetting the 4.6 percent increase in the prior six-month period between March and September of 2022.
“The LEI for India decreased in March, and its growth trajectory has been slowing since May 2022,” said Andrew Dearborn, Economic Research Assistant at The Conference Board. “Although economic expansion should continue in 2023, various headwinds could lead to more moderate real GDP growth. Most LEI components declined in March, and only the real effective exchange rate and the yield spread contributed positively to the index. Persistently high inflation, faltering international demand, and weakening business and consumer spending pose downside risks to the Indian economy. The Conference Board forecasts year-over-year real GDP growth in 2023 to be 5.0 percent, compared to 6.8 percent in 2022.”
The India LEI declined in March
The real effective exchange rate and the interest rate spread were the only positive contributors to the LEI in March
The trajectory of the LEI has been deteriorating since May of 2022
The April 24th release of composite economic indexes for India includes an updated benchmark revision. The indexes are normally revised throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. In addition, with the April release a component of The Conference Board Coincident Economic Index® for India (CEI) – motor vehicle sales which is no longer available – has been replaced with total passenger vehicle sales. These benchmark revisions resulted in a small level change in the CEI compared to the history issued prior to this release. However, the overall cyclical properties of the indexes remain the same. Because of these benchmark revisions, the revised indexes, in levels and month-on-month changes, will not be directly comparable to the index data issued prior to April 2023.
For more information, please visit https://www.conference-board.org/topics/business-cycle-indicators/ or contact us at indicators@conference-board.org.
About The Conference Board Leading Economic Index® (LEI) for India: The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by around 8 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.
The eight components of The Conference Board Leading Economic Index® for India include: Interest rate spread, BSE: Index, REER: 40 Currencies, M3: Bank Credit to Commercial Sector , Merchandise Exports, Cargo Handled, IP-Capital Goods, and India PMI: Services Business Activity.
To access data, please visit: https://data-central.conference-board.org/
About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org • Learn more about our mission and becoming a member
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