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India, China see strong signs of economic slowdown: OECD

business Updated: Jul 09, 2012 22:15 IST

India and China, two of the world’s fastest growing economies, are witnessing strong signs of slowdown, while most of the developed nations are seeing moderate growth, according to Paris-based think tank OECD.

The Organisation for Economic Cooperation and Development (OECD) on Monday said that economic activities in India and China are below their long-term trends.

The latest readings are based on Composite Leading Indicators (CLIs) that provide early signs of turnaround in economic activities of a country.

“CLIs for China and India point strongly to a slowdown with economic activity falling below long-term trend,” OECD said.

India’s CLI slipped to 97.8 in May from 98 in the previous month. Similarly, the CLI for China declined to 99.2 in May from 99.4 in April.

After clocking 8.4% growth for two consecutive financial years, Indian economy expanded just 6.5% in the last fiscal. The Indian government, in its 2012-13 Budget, had projected a growth of around 7.6% this fiscal.

Meanwhile, the OECD said the indicators point to an easing of economic activity in most major OECD economies and a more marked slowdown in most major non-OECD economies.

OECD is a grouping of mostly developed nations that account for over 60% of the global economic output.

“The CLIs for Japan, the US and Russia remain above long-term trend but continue to point to dissipating momentum, especially in the case of Russia,” the grouping noted.

Further, the indicators for France, Germany, Canada, the UK and the euro area revealed economic activity were below long-term trend. “In Italy the CLI signals point more strongly to a slowdown,” it added.