Composite Leading Indicator (CLI)
Why in news?
India's Composite Leading Indicator (CLI) has shown steady improvement, reaching 100.85 points in November 2025, signaling positive short-term economic momentum. Recent RBI reports highlight a new sector-specific CLI for manufacturing GVA, while OECD data continues to track broader trends.​
About Composite Leading Indicator
- The Composite Leading Indicator (CLI) is an index that provides early signals of turning points in business cycles by tracking economic activity relative to its long-term potential.
- Developed by the OECD, it aggregates multiple short-term economic indicators for qualitative assessment of growth phases.
- Values are normalized around a long-term average of 100, with trends above 100 signaling expansion and below indicating potential slowdowns.​
Global Context (OECD)
- Developed by the OECD for G20 countries and some aggregates.
- Measures fluctuations around the economy’s long-term potential level.
- Expressed as an amplitude-adjusted index (long-term average = 100).
- Provides qualitative signals (upturns/downturns), not precise forecasts.
Indian Context
- The Reserve Bank of India (RBI) has proposed a CLI specifically for Gross Value Added (GVA) in Manufacturing.
- Frequency: Quarterly.
- Objective: Strengthen short-term economic assessment and anticipate business cycle shifts.
- Indicators used: Domestic demand, Inflation dynamics, Survey-based sentiments, Industrial credit flows, Uncertainty metrics, Global macroeconomic trends.
Current Data (India)
- As of Nov 2025, India’s CLI stood at 100.85 points, slightly up from 100.75 in Oct 2025.
- Long-term average = 100.
- High: 104.21 (Feb 2000)
- Low: 68.38 (Apr 2020, pandemic shock).
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