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OECD September 2021 CLI Point to Moderating Growth

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The Organization for Economic Cooperation and Development (OECD)’s Composite Leading Indicators (CLI) in September 2021 indicated that growth remains at above-trend levels but is moderating in the OECD area.

Among the major OECD economies, the signs of a moderating growth at above-trend levels already were flagged in last month’s assessment. They now have been confirmed in Canada, the euro area as a whole, including Germany and Italy, and in the United Kingdom. In France the CLI points to a moderation in the pace of growth and remains below trend levels. In contrast, the CLIs for the United States and Japan now point to stable growth above trend levels.

Among the major emerging-market economies, the CLIs for Russia and China point to a steady increase in growth above trend levels. The CLI for India remains below trend but continues to signal stable growth, whereas in Brazil the CLI continues to anticipate slowing growth from above trend level.

The CLIs are designed to anticipate turning points in economic activity relative to trend and are published on a monthly basis. This month however, the OECD warns that “persisting uncertainties [related to the COVID pandemic] might result in higher than usual fluctuations in the CLIs and their components. As such, the CLIs should be interpreted with care and their magnitude should be regarded as an indication of the strength of the signal rather than as a measure of the degree of growth in economic activity.”


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