The CEIC Leading Indicator is a proprietary dataset designed by CEIC Insights to precede the development of major macroeconomic indicators and predict the turning points of the economic cycle for key markets. It is a composite leading indicator that is calculated by aggregating and weighting selected leading indicators covering various important sectors of the economy, such as financial markets, the monetary sector, labour market, trade, and industry. It is developed through a proprietary CEIC methodology and employs data from the CEIC database. The CEIC Leading Indicator currently covers eight regions – Brazil, China, India, Indonesia, Russia, the Euro Area, Japan, and the United States.

After a temporary decline in September, the CEIC Leading Indicator for India increased once again in October by 4.7 points to 106.8. The turnaround in the CEIC leading indicator can be attributed to the rising electricity generation and wholesale food price index, as well as to the narrowing of the decline in passenger car production. Electricity generation grew by 2.9% y/y in October as the coal shortage eased, compared to a decline by 1.8% y/y in September. Food price inflation at the wholesale level picked up, rising by 3.1% y/y after four consecutive months of moderation. Passenger car production continued to decline on the back of subdued car sales, albeit the decline moderated from 37.5% y/y in September to 24.6% y/y in October.

An increase in money supply by 12.5% y/y in October also contributed to the increase in the CEIC leading indicator. On the other hand, steel production, treasury bills, and equity indices played the role of a detractor. Finished steel production declined for the first time in fourteen months, by 1.3% y/y in October. Crude steel production decelerated by 2% y/y in October, in comparison to 7.3% y/y in September. The 91-day treasury bill amount outstanding continued to decline for the third month, but the drop in October moderated to 3.4% y/y, from 10.4% y/y in September. The cut-off yield for these bills increased to 3.56% pa in October from 3.45% pa in the previous month. The Bombay Stock Exchange witnessed a slowdown in the pace of increase, as it closed at 59,306.93 in October, recording only a 180.57-point growth from the September value.

Despite an increase in the actual CEIC leading indicator, the smoothed CEIC Leading Indicator did not turn around and recorded a fourth consecutive decline, to 105.9 in October. This suggests that the long-term downward risk to India’s growth lingers on, especially as the commodity prices remain elevated globally and supply chain disruptions are yet to ease. 

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