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Indians upbeat despite economic slowdown

Indians upbeat despite economic slowdown
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First Published: Tue, Jan 13 2009. 09 25 PM IST
Updated: Tue, Jan 13 2009. 09 25 PM IST
New Delhi: At a time when consumers across the world are shaken by an economic slowdown, Indians are confident that the local economy is not going to be affected much. They also believe that the economy will look up in the next 12 months.
India has topped the Global Consumer Confidence Index of information and media firm Nielsen Co. BV, for the second half of 2008.
According to the half-yearly Nielsen Global Consumer Confidence survey, 51% of consumers surveyed in India said the economic scenario in the country will improve in the next one year. The consumer confidence index was compiled by the study after surveying 26,000 people from 52 markets across the world.
Around 82% of these markets recorded a decline in the index as compared with the first half of 2008.
The survey found consumers in developing countries to be more optimistic.
Brazil, China and Russia were the other markets where consumers were more confident about the economic scenario than the rest of the markets.
“Despite the global economic recession, Indians seem to be quite confident of the economy picking up in the near future,” Sonia Pall, executive director, consumer research, Nielsen, said in a statement.
“They believe that the global recession will have limited impact on India where the domestic market is believed to be large enough to support continued growth.”
Indian consumers are quite optimistic about job prospects and personal finance in the near future, the survey found.
Around 16% of the Indian respondents said job prospects in the country were excellent, whereas 59% said the prospects were good.
“At 75%, Indians are the most upbeat when it comes to local job prospects over the next 12 months,” the survey said.
Indian consumers’ perception about the state of their personal finance also seemed much better than their global counterparts.
Of all the Indians surveyed, 9% thought their personal finances were in an excellent state, whereas 68% considered their personal finance status to be good.
The survey found Indian respondents to be upbeat on purchase decisions as well. Around 40% said now is a good time to buy things they want or need.
The survey also found that Indians continue to save aggressively with around 58% putting their spare cash into savings.
According to the survey, 42% Indians continue to invest in stocks or mutual funds. This, however, was down 6% from the previous survey, but was still the fourth highest percentage globally.
The survey found 34% of Indians spend their spare cash on paying off debt, 32% on new clothes, 28% on new technology products, 27% on improving or decorating their homes, 20% on out-of-home entertainment and 20% on retirement funds.
“Saving for a rainy day is still a priority for Indians but they don’t want to lose out on opportunities to create and recreate wealth,” Pall said. “Even in an economic downturn, Indians are cautious but still interested in investing in shares and mutual funds if they have spare cash.”
Some economists, however, didn’t agree with the findings of the survey. “I think the consumer confidence is going to get worse (in the near future),” said Rajiv Kumar, director and chief executive of Indian Council of Research in International Economic Relations, a New Delhi-based think tank.
Once the latest GDP (gross domestic product) data for the quarter ended December is out in February, the confidence is likely to change, Kumar said.
Echoing similar views, Rajesh Shukla, a senior fellow at National Council for Applied Economic Research, said: “It is too early to say how things will shape up.”
“In India, the scenario will change completely after the general election due over the next three months. Also, the impact of the global slowdown on India will take at least two years to become neutral.”
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First Published: Tue, Jan 13 2009. 09 25 PM IST