OECD Leading Indicators Point to Slowing Japanese Growth
February 08 2016 - 6:50AM
Dow Jones News
Japan's economy may slow over coming months, while there are
signs that China's economy is stabilizing, according to leading
indicators released Monday by the Organization for Economic
Cooperation and Development.
The Paris-based research body said its gauges of future economic
activity—which are based on information available for
December—continue to point to slowdowns in the U.S., the U.K. and
Russia, steady growth in the eurozone, and an acceleration in
India.
As with Japan, the OECD said its leading indicators for Canada
now show "signs of easing growth," having previously pointed to
stable growth.
Late last month, the Bank of Japan set a key short-term interest
rate below zero as part of a broader effort to reinvigorate a
sputtering economy and sluggish inflation.
Three years after taking office, Prime Minister Shinzo Abe's
effort to revive Japan's economy are still struggling to gain
traction. The economy contracted in the second quarter of last
year, but grew slightly in the third quarter. Figures for the
fourth quarter of 2015 will be released Feb. 15. The OECD's leading
indicators indicate that the economy was on course for a weak 2016
before the BOJ decided to take fresh action.
However, the leading indicators for China and Brazil suggest
that slowdowns in two of the world's largest developing economies
may come to an end over coming months. According to the OECD, the
gauges of future activity point to "tentative signs of
stabilization."
The OECD said its leading indicator China rose to 98.1 in
December from 98.0 in November, its second straight month of
increase.
The OECD's leading indicators are designed to provide early
signals of turning points between the expansion and slowdown of
economic activity, and are based on a variety of data series that
have a history of anticipating swings in future economic activity.
The changes in economic activity signaled by the indicators usually
follow six to nine months after they are recorded.
Taken as a whole, the indicators suggest the global economy is
unlikely to pick up significantly in 2016, with only India and
France set for an acceleration.
The OECD's composite leading indicator for its 34 members fell
to 99.7 from 99.8 in November. A reading below 100.0 points to
growth that is slower than normal.
Write to Paul Hannon at paul.hannon@wsj.com
(END) Dow Jones Newswires
February 08, 2016 06:35 ET (11:35 GMT)
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