India’s economy kept up the momentum in the second quarter of the current financial year, with business confidence rising to a two-quarter high of to 68.2, the Confederation of Indian Industry (CII) has said.
The industry body's business confidence index rose to 68.2 in the July-September period from 67.3 in the previous quarter, with a jump in expectations index contributing to the rise even as the current situation index moderated.
“Improvement in consumption, especially rural demand; steady progress in monsoon & higher kharif crop sowing, fresh sightings in private investment and continued emphasis on reforms were cited as the top positives for the Indian economy in the current fiscal (FY25),” CII said on October 6.
Nearly 59 percent of the 200 respondents who participated in the survey also recorded an improvement in private capex in the first half of the year compared with the previous six months.
Around 80 percent said inflation is likely to stay below 5 percent in the current fiscal. India’s inflation declined to 3.6 percent in August, data released by the government last month showed.
A rate cut on cards?
Expectations of a rate cut were also high, with more than 65 percent of respondents factoring in a rate cut in the current fiscal.
The Reserve Bank of India, which began its policy meeting on October 7, is likely to keep the policy rate on hold. The central will share the policy outcome on October 9.
A Moneycontrol poll has found that the central bank may go for a rate cut in December.
The RBI left the policy rate unchanged for the ninth consecutive time in its August meeting.
The economy slowed a bit in the September quarter, with services activity falling to a 10-month low and manufacturing at its slowest in eight months.
Consumption was a mixed bag — two-wheeler sales picked up but personal vehicle sales saw a drop.
Monsoon rains have been 8 percent higher than normal for the June-September season. Sowing was 0.8 percent higher than average.
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