KUALA LUMPUR (March 13): Developed economies are on the recovery path, lifting the optimistic sentiments of a global recovery, as the OECD composite leading index (CLI) posted its third consecutive months of gains in January.
CIMB Economics Research said on Tuesday that however, the indicators for China and Asean reaffirmed its expectations of slower but respectable growth rates.
In its economic outlook, it said the OECD CLI growth was gaining momentum after rising 0.4 of a point in January 2012 (up 0.3 in December, up 0.2 in November).
As for the US and Japan CLIs, there were four straight months of positive growth, presaging more heartening economic conditions ahead.
It pointed out that even the debt-plagued 17-nation Eurozone registered a 0.2 point increase, the second month of expansion that snapped 10 months of negative month-on-month changes.
“The CLIs for the emerging economies show a less decisive course, though we continue to predict a slower, albeit respectable, growth rate,” it said.
CIMB Economics Research said the factors were that China’s CLI continues to point to below-trend growth as its exports and industrial production loses steam.
As for India, its CLI showed stronger signs of a positive change in growth momentum.
The research house said the Asian Business Cycle Indicators (ABCIs) show weak growth momentum in most Asean economies, albeit with some signs of improvement.
“Despite these and other encouraging global data as well as positive policy developments helping to calm waters in Europe and US, we remain cautious as tail risks remain,” it said.
Among the concerns were: 1) tensions in the Middle East which could trigger a global oil price shock; 2) unresolved uncertainty with regards to the Eurozone’s sovereign debt saga that will sap confidence; 3) high joblessness and concomitant impact on consumer spending in the advanced economies; 4) fiscal cutbacks in developed economies that dampen, if not eliminate, growth; and 5) potentially destabilising capital flows in emerging economies.
CIMB Economics Research said on Tuesday that however, the indicators for China and Asean reaffirmed its expectations of slower but respectable growth rates.
In its economic outlook, it said the OECD CLI growth was gaining momentum after rising 0.4 of a point in January 2012 (up 0.3 in December, up 0.2 in November).
As for the US and Japan CLIs, there were four straight months of positive growth, presaging more heartening economic conditions ahead.
It pointed out that even the debt-plagued 17-nation Eurozone registered a 0.2 point increase, the second month of expansion that snapped 10 months of negative month-on-month changes.
“The CLIs for the emerging economies show a less decisive course, though we continue to predict a slower, albeit respectable, growth rate,” it said.
CIMB Economics Research said the factors were that China’s CLI continues to point to below-trend growth as its exports and industrial production loses steam.
As for India, its CLI showed stronger signs of a positive change in growth momentum.
The research house said the Asian Business Cycle Indicators (ABCIs) show weak growth momentum in most Asean economies, albeit with some signs of improvement.
“Despite these and other encouraging global data as well as positive policy developments helping to calm waters in Europe and US, we remain cautious as tail risks remain,” it said.
Among the concerns were: 1) tensions in the Middle East which could trigger a global oil price shock; 2) unresolved uncertainty with regards to the Eurozone’s sovereign debt saga that will sap confidence; 3) high joblessness and concomitant impact on consumer spending in the advanced economies; 4) fiscal cutbacks in developed economies that dampen, if not eliminate, growth; and 5) potentially destabilising capital flows in emerging economies.
