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 which 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.
The CEIC Leading Indicator for India increased further to 116.3 in January 2021 from 114.9 in December 2020, the highest in a decade, again driven primarily by an acceleration in monetary and financial indicators. Money supply grew by 19.5% y/y in January. The surge in stock market indices moderated in January and their end-month values were lower than in December, even though the monthly average was higher in January. The amount outstanding in 91-day treasury bills rose by 19.3% y/y in January 2021 and the yield increased to 3.4% pa, showcasing an improvement in investor sentiment in India. In terms of real indicators, an increase in electricity generation by 6.9% y/y in January also added to the increase in the leading indicator. Crude steel production and finished steel production accelerated by 7.2% y/y and 4.1% y/y, respectively, signifying a substantial improvement in industrial production. Consumer sentiment remained slightly depressed, as vehicle sales and wholesale food prices declined by 2.3% y/y and 0.3% y/y, respectively.
The smoothed CEIC leading indicator increased to a historic high of 119.3 as a result of the strengthening revival of economic activity. The sustained growth in the smoothed indicator is indicative of the steady recovery of the economy in the medium term.
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