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Indian consumer confidence rising: Survey
By agencies
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Thursday, 26 May 2005, 19:30 IST
NEW DELHI: Indian consumers appear to be a confident lot.
According to the latest survey by MasterCard International, Indian consumers are more optimistic about the next six months now than they were in August or even February last year.
MasterCard conducted this survey across seven markets: Egypt, Kuwait, Lebanon, Saudi Arabia, the United Arab Emirates, South Africa and India, awarding points on a scale of 1-100 across five parameters.
In India, consumer sentiment has shown significant improvement, scoring 72 points in February this year against only 58 six months ago, MasterCard said in a statement.
"The consumers in India are slightly optimistic about employment (54.6), fairly optimistic about the economy (69.7) and quality of life (74.7), and have fairly high expectations of regular income (80.5) as well as of the stock market (80.1)," it said.
Called the MasterIndex of Consumer Confidence, this survey also found that consumer sentiment is on the rise in almost all markets surveyed.
Senior Economist, Economic Intelligence Unit at MasterCard, Tom Joehnk, said, "For the Indian consumer, low interest rates, well-anchored inflation expectations and a positive economic growth outlook have been the major drivers of increasing optimism. Indian consumers were only mildly optimistic in the last two MasterIndex surveys."
Joehnk said the current level of investment, which is 26 percent of GDP, is insufficient to sustain growth of 7-8 percent.
He said he was disappointed with the banking reforms particularly with reference to the presence of foreign banks in India, because it keeps out competition.
"The conditions in India are not conducive to foreign banks. However, the impact will be felt only after 2009, which is when the second phase of reforms will begin," he said.
Joehnk said there is a likelihood of a slowdown in global economic growth in two years, but it will not impact India much because the country is not fully integrated with the global economy.