The Organisation for Economic Co-operation and Development (OECD) has released its latest Composite Leading Indicators (CLIs), which suggest that the economic rebound from the pandemic in Canada, Germany, Italy, and the UK is slowing down.
Pandemic Rebound Peaks
According to the OECD’s CLIs for November and December, the post-pandemic peak had already been reached. The latest measure indicates that this peak has now passed for these economies. This means that the rapid economic growth experienced in recent months is likely to slow down in the coming months.
OECD’s Leading Indicators
The OECD’s CLIs are designed to predict economic trends by monitoring a range of indicators, including:
- Order books
- Confidence
- Building permits
- New car registrations
- Long-term interest rates
These indicators provide a sense of the direction of the economy over the next six to nine months.
Uncertainties and Fluctuations
The OECD notes that uncertainties from COVID-19’s spread, particularly the Omicron variant, may result in higher-than-usual fluctuations in its indicator. This means that economists and policymakers will need to be cautious when interpreting the data.
Canada’s Economy
In Canada, the pandemic rebound has peaked and is losing momentum, says the OECD. This is likely due to a combination of factors, including the spread of COVID-19 variants and reduced government support measures.
Global Economy
While the economic rebound in major OECD economies like Canada, Germany, Italy, and the UK is slowing down, other countries like Japan, the eurozone, and the United States are showing stable growth. This suggests that the global economy remains a complex and dynamic system, with different regions experiencing varying trends.
Implications for Policymakers
The OECD’s findings have significant implications for policymakers, who will need to carefully monitor economic trends and adjust their policies accordingly. This may involve implementing new support measures or fine-tuning existing ones to address the slowing economy.
Conclusion
The OECD’s CLIs provide valuable insights into the direction of the global economy. While the pandemic rebound in Canada, Germany, Italy, and the UK is slowing down, other countries are experiencing stable growth. Policymakers will need to carefully navigate these trends to ensure a smooth recovery from the pandemic.
Sources:
- OECD (2022). Composite Leading Indicators.
- Reuters (2022). OECD says Canada’s economic rebound has peaked.
- Financial Post (2022). Canada’s economy slows down as pandemic rebound peaks.
