India's LEI drops in January, CEI rebounds with strong growth: TCB

The Conference Board Leading Economic Index (LEI) for India fell by 0.3 per cent to 158.5 (2016=100), reversing December’s modest 0.2 per cent gain.

The LEI, which serves as a forward-looking indicator of economic trends, increased by just 0.1 per cent over the six months from July 2024 to January 2025. This represents a sharp slowdown compared to the 1.7 per cent growth seen in the previous six-month period from January to July 2024, indicating potential headwinds for the country’s economic momentum.

In contrast, the Conference Board Coincident Economic Index (CEI), which tracks current economic activity, surged by 5.2 per cent in January 2025 to 156.9 (2016=100), fully recovering from a 4.4 per cent contraction in December. However, despite the strong monthly rebound, the CEI still reflects an overall decline of 4.6 per cent over the last six months, following a 2.3 per cent growth in the preceding six-month period.

“The LEI for India fell in January, erasing the December gain. The real effective exchange rate, the PMI in services business activity, and stock prices more than offset positive contributions, mainly from bank credit to the commercial sector. Beyond the monthly fluctuations, the Index has been moving sideways since mid-2024,” Ian Hu, economic research associate, at The Conference Board said in a release.

 “As a result, both India’s semi- and annual growth rates weakened significantly compared to the impressive performance in early 2024, suggesting some headwinds to economic growth in 2025. Overall, all-in-all, the Conference Board currently estimates that India’s real GDP grew by 6.4 per cent in 2024 and forecasts a slight slowdown to 6.0 per cent in 2025,” Ian added.

ALCHEMPro News Desk (HU)