OECD sees positive change in economic momentum

Japan may have reported a contraction in its economy for the fourth quarter on Monday but it remains one of those that is driving an improvement in the world economy, according to the report on the OECD's composite leading indicators for December.

Composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, point to a positive change in momentum for the OECD as a whole, driven primarily by the United States and Japan, but similar signs are beginning to emerge in a number of other developed economies. The CLIs for India and Russia also show signs of an upward change in growth momentum.

OECD composite leading indicators
	Ratio to trend, amplitude adjusted			Change from previous month
	Oct	Nov	Dec	Oct	Nov	Dec
OECD area	100.1	100.2	100.4	-0.1	0.1	0.2
United States	100.8	101.3	102.0	0.2	0.5	0.7
Euro area	98.8	98.5	98.3	-0.5	-0.3	-0.1
Japan	101.5	101.7	101.9	0.0	0.1	0.2

The CLI for the euro area continued to decline in December but by a smaller amount than in previous months. The OECD noted that the CLIs for seven of the fifteen countries in the euro area “are now pointing towards a positive change in momentum”.

Souring the mood somewhat was Moody's, which cut the debt ratings of Italy, Portugal, Spain, Slovakia, Slovenia and Malta on Monday.

Moody's also downgraded the rating outlooks of France, the UK and Austria to negative.