Photo: Mint
© Mint

New Delhi: Indian consumer confidence rebounded strongly in November after dipping in October, buoyed by increased optimism about the country’s economic outlook over the next 12 months as well as the next five years, according to a survey released on Wednesday.

The ANZ-Roy Morgan India Consumer Confidence Index rose to 122 in November, up 9.5 points compared with the previous month, pushing the index above its long-term average of 117.

On the economic conditions in India, 59% (up 10 points) of the respondents expect the country to have “good times” financially in the next 12 months, while 14% (down seven points) expect “bad times”.

When assessing the country’s long-term prospects over the next five years, more than half of the respondents, or 58% (up 10 points), expect India to have “good times”, while 8% (down five points) expect “bad times” financially.

Also, 22% (up one point) of the respondents said “now is a good time” to buy major household items compared with 17% (down two points) who believe otherwise.

In terms of personal finances, 19% (up five points) of the respondents said their families are “better off” financially than a year ago, the highest since March 2015. On the other hand, 30% (down four points) said their families are “worse off”.

About 36% (up two points) of the respondents said they expect their families to be “better off” financially in a year’s time, but 15% (down one point) believe themselves to be “worse off”.

ANZ chief economist, South Asia, Asean and Pacific, Glenn Maguire, said the rebound in consumer confidence is driven more by long-term factors than short-terms ones. “There appears to be important medium-to-long-term anchors influencing consumer confidence, which we could continue to assess as most likely being ‘Modiesque’. These medium and longer term anchors should ensure domestic demand will not slip and India’s economic recovery trajectory will remain intact,” he added.

Another report released by Moody’s Investors Service on Wednesday said that most non-financial companies in India will benefit from strong domestic growth and accommodative monetary policy, although weak global growth and a potential US rate hike will weigh on businesses.

“Healthy 7.5% GDP (gross domestic product) growth for India for the fiscal year ending March 2017 (FY2017) and a pick-up in manufacturing activity will be broadly supportive of business growth,” says Vikas Halan, Moody’s vice-president and senior credit officer.

The recommendations of the Seventh Pay Commission which has proposed 23.6% hike in salaries and pensions starting 1 January 2016 is expected to give a boost to consumer demand.

In the real estate sector, Moody’s expects demand to improve in 2016 on the back of lower interests rates, although approval delays could push back project launches for property developers.

In the auto sector, Moody’s expects retail sales volume to grow 6% in 2016 on the back of sustained growth in passenger vehicles sales and a recovery in commercial vehicle sales.