The world economy at the end of the year is very different than it was last year at this time. Still, as we end one 12 month cycle and begin a new one, there is reason for optimism across Asia and around the world that the global economy is on the path to growth.

The OECD Composite leading indicators (CLIs) continue to recover from the COVID-19 crisis lows in most major economies, but the rate of change differs across countries.

In the United States, Japan and Canada, the CLIs point to stable growth. In France, Italy, and more tentatively Germany, the CLIs show signs of moderating growth. In the United Kingdom, where there is heightened uncertainty around the prospect of a trade deal with the EU being concluded before the end of the year, the CLI contracted for the third straight month.

Among major emerging economies, the CLI for the manufacturing sector of China is improving steadily. This is also now the assessment for Brazil. In India, the CLI continues to rise but at a moderating pace, while in Russia growth of the CLI has stabilised.

Whilst the impact of renewed COVID-19 containment measures has been largely incorporated into the forward- looking indicators used to construct the CLI estimates, the more recent positive news concerning vaccine developments may not be. As such, this month’s CLIs should continue to be interpreted with care.