Growth in Asia to moderate: OECD

The Organisation for Economic Cooperation and Development (OECD) said growth in Asian economies like China and India that had been guiding global economic recovery, will moderate in the coming months.

The OECD said economic output in its 33 member-countries is showing signs of slowing, particularly in China and the United Kingdom. It said governments should review their stimulus policies and consider adding more to sustain global recovery.

The OECD’s Composite Leading Indicator (CIL) decreased 0.1 per cent for the second consecutive month in July 2010, indicating that the world economy is slowing as European governments are cutting budget deficits and rising unemployment is tempering consumer spending in the US. India’s CIL has been declining since March 2010 by 0.2 points.

“In Canada, France, Italy, the UK, China and India there are stronger signals of slower pace of economic growth in the coming months…overall, growth prospects are stronger on an average for the Asean economies than for emerging Asia area including China and India,” OECD said in its report.

China registered a decline of 0.4 points in CIL. It is the fifth consecutive decline for China. Germany and Russia were one of the few countries to see a rise of 0.1 and 0.2 points, respectively, in July.

The report said global economic recovery is proving slower than projected and policy makers might need to extend or bolster stimulus programs to support the global recovery process.

The OECD is of the view that growth particularly in the manufacturing sector of its member countries, peaked in the first quarter and will head southwards in the coming quarters.