Most of the major economic data for the month of October have been released; some of them are negative, a few others positive, or to be precise, less negative. And like every time before, the negatives are testing our patience while the positives are met by most of us with scepticism. Pessimism is resisting to leave our minds, although this is going to help none, while optimism is finding it too difficult to make a comeback, although this is what the economy needs most right at this moment.
In these troubled times, not keeping trust in the economy could result in mayhem. Confidence must be restored, and we all have a role to play here. But this is not the only reason why here I want to point out some positives taking place in the economy, slowly but steadily, and perhaps also stealthily. I'm feeling optimistic, and for this, you may blame what I am seeing with my own eyes in the recent few days, and if I go with what my gut feeling is telling to say, it's here: some degree of economic recovery isn't far off.
The nature of my business often helps me to get the big picture of the market and industry easier. Every week, my sales people deal with at least a few thousand small and medium-sized companies, and update me on their discussions, and whenever there is an opportunity, I try to grab an idea about their future plans in terms of capital investment, promotional activities or things like that. And fortunately, these days I am finally seeing confidence in the eyes of many of them. Business owners are talking about expansion and growth, they have started spending, and all this signals to something more positive overall.
My logic might not seem much compelling, but if my observations are taken as a survey, which is conducted over a non-negligible sample size, I see no reason to discard my forecast altogether.
A recent survey also shows spike in confidence. The HSBC Purchasing Managers' Index (PMI) -- a measure of factory activity-- jumped to a five-month high of 53.7 points in November from 52.9 in October, driven by pick-up in new orders. Also, in terms of exports, there is a decline of 1.6% in October, but the rate of decline is decreasing gradually, from 15% in July, followed by about 10% both in August and September.
Finally, the recent reform measures introduced by the government, after the self-inflicting injuries due to the former Finance Minister Pranab Mukherjee's budget announcements on GAAR, are worth mentioning. Particularly the series of FDI reform measures in multi-brand retail, aviation and broadcast, PSU divestment, followed by pension and insurance sector reforms and also changes in the Companies Act -- all are confidence boosting measures.
Of course, my optimism is not based on any economic model, neither I am using, like most of the central banks across the world do, any sophisticated computer program to make my forecast. In fact, by contrast, my views may negate some potent macro economic indicators and statistics. But I am just trying to see what actually is happening around me, and as a layman trying to predict what the ground realities are, and how events might unfold over the coming months. I would like to invite feedback from our readers on this. |
