Investment Activity To Remain Subdued In Short Term: D&B

Posted By: Staff
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A report has said that investment cycle is likely to see an enhancement in medium-term largely driven by improved rural income due to normal monsoon and rise in consumption owing to the 7th Pay Commission awards.

Investment Activity To Remain Subdued In Short Term: D&B

According to D&B Economy Observer Index, while government capital expenditure has gone up, low private investment is likely to keep improvement in investment activity 'subdued' in the short term, while the medium term outlook looks bullish.

Commenting on the issue, Dun & Bradstreet India Lead Economist Arun Singh told the media, "Expected improvement in rural income and consumption given normal monsoon and likely demand for consumer goods given 7th pay commission award which was doled out just before the festive season is likely to provide support to growth and investment cycle in the medium-term."

According to D&B, while 7th Pay Commission payouts ahead of the festive season is likely to support the consumer goods segment, slowdown in flow of financial resources to the commercial sector, low capacity utilisation and high leverage in the corporate sector is likely to keep IIP muted.

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