Take almost any index, and the result is unambiguous. Last year's sharp slide - in growth, credit, housing and more - has slowed, even reversed, though very slightly. How long a full-blown recovery will take is anyone’s guess. The global economy shrank 5 per cent in the last quarter (on an annualised basis) and that of advanced countries fell 7 per cent. To put the upturn in perspective, while 337,000 new homes were sold in the US in February 2009, the figure was 580,000 in even February 2008; the Purchasing Managers’ Index (PMI) rose to 36.3 in the US last month as compared to 49 in March, 2008 (below 50 indicates a contraction) - it was 33.8 for Japan and 32.4 in Germany last month.
Global risk spreads are still very high; while fund managers are more confident, they still prefer cash and US T-Bills. Though India’s exports continue to shrink, the fall in IIP appears to be moderating; core sector growth is much lower than last year, but is picking up. Consumer sales keep fluctuating, but the organised sector has begun hiring again; the PMI is nearly out of negative territory. Non-food credit has been rising for the last two months — March levels for 2009 were the same as for 2008. This could be the real thing.
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