According to Dun & Bradstreet (D&B), the outlook
for the Indian economy remained buoyant, though the risks
of rising interest rates and appreciating rupee remain.
Sampath, CEO, D&B India Private Limited, said, that
while business confidence is difficult to predict over
the long term, "we remain confident over the long
term growth prospects of the Indian economy. The Indian
economy continues to look optimistic; latest growth estimates
reveal that GDP grew by 8.6 per cent during the third
quarter of financial year 2007," he said.
however, added, that during the next quarter, business
confidence would be determined by movements in inflation
and the monetary policy stance of the RBI (Reserve Bank
also said it would it difficult to quantify the exact
impact of the appreciation of the rupee on the Indian
the appreciation of the rupee will make our exports more
expensive and therefore less competitive. At the same
time, imports will become cheaper. We need to wait and
watch the RBI''s stance with respect to the rupee appreciation,"
industrial sector has also continued to display a healthy
performance. The index of industrial production (IIP)
grew by 12.9 per cent in March 2007, taking the cumulative
IIP growth for the fiscal year to a 10-year high of 11.3
capital and intermediate goods sectors have also registered
impressive growth rates of 13.2 per cent and 13.3 per
cent respectively in 2007 an indication of continued
robustness. Industrial production is therefore likely
to continue with its current momentum.
he pointed out that interest rate hikes and an appreciating
rupee remained a downside risk. Growth in the consumer
durables has slowed down to 9 per cent in 2007, as compared
with 15.3 per cent in the previous fiscal. A high base
effect on the growth of consumer goods was evident, but
nevertheless the impact of rising interest rates could
not be completely ruled out.
the first quarter of the current fiscal (April-June 2007),
the composite Business Optimism Index (BOI), which the
RBI frequently quotes in its monthly bulletin, stood at
201.2 points, recording an increase of 3.4 per cent on
a quarter-on-quarter basis. On a year-on-year basis, the
BOI recorded an increase of 13.3 per cent.
D&B BOI is barometer of the business community''s expectations
with regard to certain key parameters.
of the six optimism indices, namely volume of sales, net
profits, selling prices and new orders have decreased
as compared to the previous quarter. The capital goods
goods sectors were the most optimistic, particularly with
regard to order book positions. The consumer durables
sector, on the other hand, seemed the least optimistic
with regard to most parameters.