Economy gets a boost as inflation rate declines

MUMBAI: Economic confidence has got a major boost primarily due to declining inflation rate for the fourth consecutive month, at 6.62 per cent in January and positive investor confidence, according to a report by global research firm Ipsos.

According to the “Ipsos Economic Pulse of the World” survey, India's economic confidence shot up by 8 points to 68 per cent in the month of January 2013 compared to the month of December 2012, making it the second most economically confident country in the world after Saudi Arabia.

Mick Gordon, CEO of Ipsos in India said, “shedding its 9-month long hawkish monetary policy stance, the Reserve Bank of India slashed its key interest rates by 0.25 per cent taking cognisance of the moderation in demand side pressures to inflation and greater than anticipated slowdown in growth. Easing of policy rates will bring in additional liquidity into the system to perk up growth through reduced cost of borrowing”.

“The year 2013 is likely to see revival in the industrial activity and modest recovery in the services sector which would support recovery in growth levels. The pace of economic reforms that has been initiated must continue uninhibited and it needs to be effectively implemented so that it translates into tangible investment decisions,” added Gordon.

Slightly less than a half of Indian Citizens (45 per cent) believe their local economy which impacts their personal finance is good, a marginal rise of 1 points and an optimistic 53 percent people expect that the economy in their local area will be stronger in next six months.

After a four-month decline, the average global economic assessment of national economies surveyed in 24 countries takes a turn for the better in January, as 36 per cent of global citizens rate their national economies to be ‘good.’