Indians Are World's Most Confident Consumers Now

As China champions a transformation in its economy toward domestic demand, it could do with the type of sentiment burst that its biggest neighbour is now enjoying. Consumers in India -now the fastest-growing big economy -are the world's most confident, according to Nielsen. Surging personal wealth is pushing an unprecedented number of Indians to tour the globe, and companies are offering ever more exclusive attractions such as homes sold “by invitation only.“ Indians are also taking on more credit, helping to bolster spending power as the festival season approaches.
Higher consumption in a retail sector that accounts for about half the economy will help Prime Minister Narendra Modi get companies to invest more and create jobs for a burgeoning population. Spending could rise further following four interest rate cuts and a scheduled pay hike for state employees.
The continuing challenge of a global economic slowdown means it will take time to use up India's manufacturing slack -about 1.5 years until capacity utilisation reaches around 85%, Pant said, from 71.5% now. Price competition means it may take time for consumption gains to be reflected on corporate balance sheets, he added.Richer Indians, Cheaper fuel amid a global commodity slump and sliding inflation has left more cash in the hands of consumers. As average household incomes triple to $18,448 over the decade through 2020, India's retail sales will double from current levels to $1 trillion, the Boston Consulting Group estimated in a February report.
India's benchmark equity index rallied 27 percent in dollar terms last year following the election of the most stable government since 1984. That was one of the top five performances among more than 90 indexes tracked by Bloomberg. Rupee bonds have earned investors 11.4 percent over the past 12 months, the highest in Asia.
The number of rich Indians rose a world beating 26% in 2014, according to a report from Cap Gemini and RBC Wealth Management. They also borrow a lot -second only compared with their peers in the Netherlands -and among their baubles are homes in gated communities they can buy only if invited to.

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