India:1Q18 business optimism index hits 14-quarter high

  • Business optimism index for the 1Q18 touched three and half year high on improving demand conditions and expectation that government sops in the budget will revive consumption.
  • The Dun & Bradstreet Composite Business Optimism Index stood at 91.0 during 1Q18, an increase of 18.6% as compared to 4Q17. The index measures the pulse of the business community and is arrived at on the basis of a quarterly survey of business expectations.
  • The upcoming Union Budget and assembly elections during 2018 might have generated optimism about government sops that could push revival in consumption. Besides, demand condition is likely to improve given the waning of the impact of demonetisation and stability returning after GST implementation. Optimism levels are building up on net profits, selling prices and hiring of employees which indicates healthy signs for revival.
  • As the global economy is expected to pick up steam during the year and India should stand to gain from this, favourable interest rate differential and continued reforms for improving ease of doing business provide favourable ground for domestic and foreign investors.

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