India cautiously optimistic about its economy

MUMBAI: India's economic confidence improved marginally despite uncertainties that has enveloped Asia's third-largest economy, many companies and investors are optimistic about India's longer-term prospects, especially in sectors driven by domestic demand, according to a report by global research firm Ipsos.

According to the "Ipsos Economic Pulse of the World" survey, India's economic confidence slightly increased by 2 points to 60 percent in the month of July compared to the month of June, making it the sixth most economically confident country in the world after Saudi Arabia, Sweden, Germany, China and Canada.

"India's domestic consumption accounts for about 68 percent of the economy, insulating it from the worst of the global slowdown. However, India certainly gives plenty of reason for pessimism. A prolonged political logjam has thwarted reforms, stalled decision-making and intensified high inflation, which has in turn forced the Reserve Bank of India to stick to tight monetary policy, said head of marketing communication of Ipsos in India.

"This has led companies to cut investments, with capital goods output plunging, foreign direct investment down and relatively week monsoon adding to the worry. But on the sunny side significant growth in consumption from rural India brings in optimism that rural consumers will come to the rescue of Indian economy," added the Ipsos report.

Slightly less than a half of Indian Citizens (46%) believe their local economy which impacts their personal finance is good, a healthy rise of 7 points and an optimistic 53 percent people expect that the economy in their local area will be stronger in next six months.