Modi effect: India’s economic confidence upbeat, reports Ipsos

MUMBAI: The Lok Sabha elections of 2014 were won on the promise of ‘achhe din aane wale hai’ (good days are going to come).


And riding on that hope, Indians are very confident that Narendra Modi-led NDA government will carry on making progress on its domestic reforms agenda and encourage investments that will trigger economic growth and create more jobs.


With more than seven in 10 (71 per cent) people expecting that the economy in their local area will be stronger in next six months, makes India the most optimistic country in the world.


Indians have emerged as the second most confident people about their economy globally by end of 2014. This is on account of falling inflation due to lower oil prices, government’s commitment to contain fiscal deficit, promote investment and economic development, according to a report by global research firm Ipsos.


According to the ‘Ipsos Economic Pulse of the World’ study, India's economic confidence level has shot up to 81 per cent in December 2014, a very significant rise of 29 points over the past 12 months.

More than half, 53 per cent Indians believe that the local economy, which impacts their personal finance is good. “The repo interest rate cut by RBI on Thursday from 8 per cent to 7.75 per cent is expected to boost economic confidence and add further momentum to economic growth,” said Ipsos India managing director Amit Adarkar.


“The decision was primarily guided by dip in inflation, a sharp fall in global crude prices and expectations that the government would be doing enough to keep the fiscal deficit in check,” he added.


The online Ipsos Economic Pulse of the World survey was conducted in November 2014 among 19,152 people in 24 countries.


The clear winners in economic confidence recovery over the past 12 months in 2014 include India (+29), Great Britain (+19), China (+17), Russia (+12, but with a precipitous slide over the past four months (-18)), Poland (+11), United States (+11), Spain (+10) and Saudi Arabia (+5). The clear losers include Brazil (-11), South Korea (-11), and Argentina (-7).


Those countries with marginal positive movement include Belgium (+2), Italy (+2), Egypt (+1), France (+1), Germany (+1), Hungary (+1) and Mexico (+1). Countries on positive watch include China (although it may have peaked), Great Britain, Poland, Spain and the United States.


Those countries with marginal negative movement include Canada (-1), South Africa (-1), and Turkey (-2). Countries on negative watch include Argentina, Belgium, Brazil and Sweden.


After showing slight improvement in November 2014, the average global economic assessment of national economies surveyed in 24 countries is down one point as 40 per cent of global citizen’s rate their national economies to be ‘good’.


Despite two point decline, Saudi Arabia (85 per cent) remains at the top of the national economic assessment in December 2014, followed by India (81 per cent), China (78 per cent), Germany (74 per cent), Canada (67 per cent) and Sweden (67 per cent). At the other end of the assessment, only a small minority rate their national economy as good in France (6 per cent), followed by Italy (8 per cent), Spain (10 per cent), South Korea (11 per cent), Hungary (13 per cent) and Romania (16 per cent).


Gaining momentum since last sounding, China (63 per cent) takes the lead in the local economy assessment ratings, which impacts people’s personal finance, followed by Saudi Arabia (61 per cent), India (53 per cent), Germany (52 per cent), Canada (47 per cent), Sweden (47 per cent) and Australia (40 per cent). Only one in ten (9 per cent) in Spain agree that the state of the current economy in their local area is ‘good’, followed by Italy (10 per cent), Japan (10 per cent), Romania (10 per cent), France (12 per cent), South Korea (13 per cent) and Hungary (14 per cent).


Once again, India (71 per cent) holds the lead in the future outlook assessment rating. The rest of the highest-ranking countries are: Brazil (58 per cent), China (53 per cent), Saudi Arabia (50 per cent), Egypt (46 per cent), Argentina (34 per cent) and Mexico (31 per cent). The lowest-ranking country this month is France (4 per cent), followed by Italy (9 per cent), Japan (10 per cent), Belgium (11 per cent), Hungary (11 per cent), South Korea (11 per cent) and Germany (15 per cent).


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