The bleak economic outlook the world over doesn’t seem to affect the confidence level of Indians, if data from the MasterCard Worldwide Index of Consumer Confidence (MWICC) is anything to go by.
The general consensus, too, is in India’s favour as compared with the rest of the world. It is believed that provided there is swift government action to address domestic problems such as high inflation, and falling investment and growth, India can come back on track even though the global problem may take time to settle down. Recent numbers also inspire confidence: the benchmark Sensex has risen 10.6% over the last seven months, though it has been a roller coaster ride; the Index of Industrial Production inched up to 2.4% in June 2012 after hitting a low of -3.2% in April 2012.
MWICC, based on a survey conducted between 24 April and 10 June among 11,376 respondents aged 18-64 years in 25 countries across Asia-Pacific, Middle East and Africa, finds that Indians are quite optimistic toward employment, economic growth, regular income, stock market and quality of life compared with sentiment in other countries. The index readings of these parameters are averaged to get the MWICC index.
For the first half of 2012, the overall MWICC index gave a reading of 82.1 out of 100 for India compared with 57.2 for the Asia-Pacific region, where 100 shows maximum optimism, 0 represents maximum pessimism and 50 represents neutrality. “A reading of around 82 is really impressive. It shows that people are hopeful that markets will either do good or remain stable in the coming months,” says T.V. Seshadri, division president (South Asia), MasterCard Worldwide.
The Indian stock market outlook was 83, a significant improvement of 13.2 from the last half of 2011 compared with Asia-Pacific’s 56.5, which showed a slight improvement of 8.6.
On the quality of life and employment fronts, too, India fares better than other regional peers. Indians are very optimistic about their quality of life in the coming months with an index reading of 84.1 compared with 51.7 for the region. On the employment front, the Indian index gave an optimistic reading of 78.3 compared with 54 for the region. “India probably shows a better reading because of the demography. India has a huge young population and they perceive their lives to be improving,” says Seshadri.
The Indian MWICC index of 82.1 is followed by China at 77.4, Vietnam at 77.2 and Thailand at 75.8. Among pessimists are Japan at 23.6, Australia with an index reading of 39.2 and and Taiwan at 25.7.
So do these index readings, which seems contrary to the current market scenario, reliable? “The index is a leading indicator and shows how the near future may be. Pertaining to India, this has been a trend that people are more optimistic compared with peers. It shows the longer term perspective of the people,” says Seshadri.
Perhaps the optimism may help pull up the otherwise gloomy looking Indian market.