
Finshots Daily
Much to cheer about India’s PMI!
Mar 25, 2024
Exploring the flaws of GDP measurement, the podcast discusses India's positive Flash PMI results, indicating potential economic growth. Insight into the PMI data warns against hasty economic decisions based on initial readings.
06:21
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Quick takeaways
- PMI serves as a leading indicator for real-time economic insights, unlike lagging GDP measures.
- Accuracy of final PMI data is crucial for making informed policy decisions, cautioning against premature actions based on flash estimates.
Deep dives
PMI as a leading indicator of economic growth
The podcast discusses the limitations of using GDP as a measure of economic growth due to its lagging nature in providing real-time insights. It highlights the importance of the Purchasing Manager's Index (PMI) as a leading indicator that offers a more immediate snapshot of the economy. By surveying senior executives on various business aspects like new orders, employment, and costs, the PMI provides a quicker assessment of the economic trajectory. The high PMI reading of 61.3 in India indicates a fast expansion in factory orders and production, signaling positive growth momentum.
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