India's economy rebounding: Conference Board index

The Conference Board's Leading Economic Index (LEI) for India increased 0.9 per cent in September to 183.5 after declining 1.2 per cent in August. The index is calculated using eight indictors of economic activity - interest rate spread (10-year government bond minus 91-day treasury bill); Sensex average; real effective exchange rate index; real money supply; merchandise exports; cargo handled; industrial production (capital goods); and services purchasing managers' index. Seven of these eight components contributed positively to the index in the month of September. 'After a disappointing August, the Leading Economic Index for India rebounded in September, suggesting that momentum in the economy continues, nevertheless, India's economic recovery for the rest of this year still faces downside risks, as highlighted by surprisingly weak capital goods production as well as car sales in the third quarter - a sign that domestic demand remains sluggish," said Jing Sima-Friedman, economist, The Conference Board. The report underlines that the durability of the recovery will depend on how global growth fares and the reforms initiated by the new government.