Differentiate between leading and lagging indicators and list seven indicators which you think are important to assess the future direction of Indian Economy.

Difference Between Leading and Lagging Indicators

• Leading Indicators: These are economic factors that change before the economy starts to follow a particular trend. Leading indicators help in predicting future economic activity, making them crucial for anticipating changes in the economy's direction. They provide early signals about where the economy might be headed.

  • Examples: Stock market performance, manufacturing orders, building permits.

• Lagging Indicators: These indicators change only after the economy has begun to follow a particular trend. They confirm patterns that have already occurred and help in understanding the current economic condition rather than predicting the future.

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