Contrary to forecasts of India seeing good growth momentum in coming months, Paris-based OECD today cautioned the country's economic recovery appears to be "losing steam".
"There are signs of regained growth momentum in the Chinese economy owing to a strengthening of investment and retail sales. India's economic recovery appears to be losing steam," it said.
OECD comprises of a grouping of mostly developed nations that account for over 60 per cent of the global economic output.
Observation by the Organisation for Economic Cooperation and Development (OECD) came even as Indian economy recorded robust growth of 8.9 per cent in the first half of this fiscal and the Government projecting the economy to expand by up to over 9 per cent this fiscal.
The observation is based on OECD's Asian Business Cycle Indicators (ABCIs), which looks at the short term economic climate of Asian economies.
ABCI is mainly based on composite index (that assesses change in economic fluctuations) and diffusion index (that provides a broader picture of overall economic activity).
Meanwhile, in Mid-Year Analysis, tabled by Finance Minister Pranab Mukherjee in Parliament last week, the economy was projected to expand by 8.75 per cent plus or minus 0.35 per cent this fiscal.
However, Mukherjee did caution against the crisis in Europe, which account for 36 per cent of India's exports.
Mukherjee had said if the sovereign debt crisis in Europe turns contagious and spreads, the country will not be able to immediately find new markets.
"Unless there is robust recovery in Europe, immediately we cannot shift our market and improve international trade scenario," Mukherjee had said.
After engulfing Greece, Portugal and Spain, financial mess has unfolded in Ireland.
Separately, the OECD's grouping's Composite Leading Indicators (CLIs) released today indicated that India's economic activity is seeing a slowdown.
CLI provide early signals of turning points in business cycles –fluctuations of economic activity around its long term potential level.
"Downturn signals are still evident for Canada, Italy and India, while Brazil remains in a slowdown phase," OECD said.
CLI for India was at 100.6 in October, slightly lower than 100.8 recorded in September.
The indicator stood at 100.9 in August.
