Indian executives are the most optimistic in the world in terms of expectations for growth in economy, their industries as well as improvement in inflation levels in their countries, a new Mckinsey study shows.
Except North America, a majority of executives across the world expect economic conditions to improve in the next six months with Indians coming on the top with as much as 81 per cent expressing a positive outlook, shows a survey conducted by international management consulting firm McKinsey.
The robust economic growth projections come despite a growing threat from inflation across the world, the study noted. In India, the latest government data showed inflation rising to 4.41 per cent in week ended July 14 after being unchanged for two straight weeks.
While fuel prices were steady during the latest reported period in India, the McKinsey study found that nearly two-third of the executives worldwide saw oil and gas costs as the biggest driver of the inflation.
Indian executives were the most optimistic about decline in inflation over the next six months, while a majority of executives from neighbouring China expected inflation to rise further from its current level. As much as 39 per cent of Indian executives expected inflation to decline, while 36 per cent saw it rising higher in the next six months.
In comparison, 75 per cent of Chinese executives saw inflation rising, as against just seven per cent expecting a fall. In North America, 59 per cent expected a rise and 10 per cent saw a decline in inflation going ahead. In Asia-Pacific, 67 per cent expect higher inflation, while 50 per cent of European executives also expected a rise.
Interestingly, in regions where overall economic outlook has become notably more positive in the past quarter, the prospect of higher inflation is prevalent, McKinsey said.
For example, Chinese respondents were not positive about inflation and 75 per cent of them felt it would go up in the next couple of months, but in India and Latin America less than 45 per cent expected a higher inflation.
"These findings are particularly surprising -- in India because rupee has been appreciating steadily against the US dollar and in Latin America because of the region's historically high rates of inflation," the study noted.
Indian executives also emerged as more optimistic than those in China, Latin America, Europe, Asia-Pacific and North America in terms of expectations for better economic growth as well as growth in their respective industries.
This is despite India being the only region where level of optimism for economic growth has fallen in past six months.
A total of 83 per cent Indians expected economy growing further during a survey by McKinsey in December 2006. This dropped to 81 per cent in the latest survey in June this year.
This was still higher than 69 per cent in China, 60 per cent in Latin America, 52 per cent in Europe, 60 per cent in Asia-Pacific, 35 per cent in North America and 64 per cent in the rest of world.
However, executives were relatively less optimistic about their industries than that of the country's economic prospects. In India, 68 per cent expected better conditions for their industry in the next six months, followed by 59 per cent in Latin America, 55 per cent in China, 45 per cent in Asia-Pacific, 40 per cent in Europe, 34 per cent in North America and 60 per cent in rest of the world.