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The business confidence in the economy is back on track though it still stays weak, according to the Reserve Bank of India survey.
In the Macro Economic and Monetary Developments released by the RBI in the third quarter review 2013-14 on Tuesday, various business indices indicated a turnaround due to a sharp growth.
Better investment prospects, improving sales, new orders and improved export performance had contributed to the rising optimism.
The Business Expectation Index (BEI) had improved marginally in the third quarter but still remained below the threshold level of 100. There was marginal improvement in sentiments regarding production, order books, capacity utilisation, exports and imports. “The demand outlook for Q4 OF 2013-14 shows improved optimism as well,” it said.
Consumer confidence as indicated by the Current Situation Index (CSI) and Future Expectations Index also showed improvement. A modest recovery of growth 5.6 per cent was expected by the forecasters outside RBI.
While all this seems to be good news, there is also a word of caution. “However, weak demand, political uncertainty, and high inflation appear to be among the factors restraining growing optimism,’’ the apex bank said.
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