OECD sees signs of broad economic recovery

The Oranisation for Economic Cooperation and Development (OECD), the Paris-based economy watchdog, said that the global economy is on a recovery path in most of the OECD economies, in particular in France and Italy, as well as in China, India and Russia.

''OECD composite leading indicators (CLIs) for July 2009 show stronger signs of recovery in most of the OECD economies. Clear signals of recovery are now visible in all major seven economies, in particular in France and Italy, as well as in China, India and Russia. The signs from Brazil, where a trough is emerging, are also more encouraging than in last month's assessment,'' the report released yesterday said.

CLI, an authentic pointer of global economic outlook, increased by 1.5 point in July over the previous month to 97.8 for the OECD economies, which is 1.9 point lower than last July. The indicator has been on the rise since it touched the lowest point of 92.6 in February.

The CLI is computed based on a wide range of parameters of the economic activity in respect of each country.  It is intended to signal turning points of business cycles–peaks and troughs–and have had a good track record of depicting qualitative information on short-term economic movements around its long term potential level of 100.

An increasing CLI above 100 indicates an economic expansion and a decreasing number above 100 signals a downturn. A slowdown is represented by a decreasing CLI below 100 and a recovery is indicated by an increasing value below 100.

OECD data covers 29 industrialised member countries and 6 non-member developing economies. The CLI started dropping below 100 for OECD countries in last July.