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Economy shows strong momentum

Indian economy is seeing strong signs of positive momentum, while neighbouring China is heading towards slower growth, Paris-based think tank OECD said.

The latest reading for the India comes at a time when there are rising concerns about prolonged slowdown in the national economy, which is expected to expand just 6.9 per cent in the current financial year ending March 31, 2012.

According to the Organisation for Economic Cooperation and Development (OECD) today said most of the developed economies are showing positive change in momentum, while the trend is stronger in India and Russia.

OECD, a grouping of over 30 nations that account for more than 60 per cent of global economic output, has based its reading on Composite Lead Indicators (CLIs).

"The CLIs for India and Russia are also showing stronger signs of a positive change in growth momentum. However the CLIs for China and Brazil continue to point to below-trend growth," the grouping said in a statement.

CLIs indicate turning points in economic activities. In January, India's CLI rose to 102.1 from 101.9 in December 2011. India is not part of OECD. Last week, the World Bank cautioned that downside risks to Indian economic growth are high.

"In India, the slowdown in GDP growth witnessed over the last two quarters is likely to extend into the coming fiscal year because of the weakness in investment," it had said.

As per official estimates, the Indian economy is likely to expand 6.9 per cent in the current fiscal, much lower than 9 per cent projected during the 2011-12 Budget.

Meanwhile, OECD today said that the US and Japan continue to drive the overall position but "stronger, albeit tentative, signals are beginning to emerge within all other major OECD economies and the Euro area as a whole".