Confidence returned amongst YPO CEOs in India in the first three months of 2016. The World Bank stated that India was the fastest growing economy in the world last year, with 7.3% GDP growth, and the rate of expansion is forecast to increase to 7.5% this year.The YPO Global Pulse Index for India rose 5.6 points to land at 66.4, putting it far ahead of the Asia composite score of 60.0 and ahead of all of the other leading economies in the world.
YPO, a network of global business leaders and chief executives, said that economic sentiment for Asia remained steady at an optimistic 60.0 in the first quarter of this year, despite significant fluctuations in confidence within the region.
The YPO Global Pulse reported that business leaders in the region are now the second most confident in the world, trailing their counterparts in the European Union.
Sentiment in China, the region’s largest economy, improved by 2.0 points in the first quarter of 2016 to 64.0, representing a higher than the average confidence level for the country.
India, in particular, witnessed a rebound in confidence level, surging 5.6 points from 60.8 in the last quarter of 2015 to 66.4 in the first quarter of this year. Economic growth in India is being fueled by a vibrant service sector, as India has become a major exporter of business outsourcing services.
“The general feeling seems to be that there are strong opportunities for growth and expansion, but CEOs will be cautious about taking on too much risk in the current economic environment,” said Paul Tao, managing director of New Heritage Investments Limited and network officer in YPO Hong Kong Chapter. "Increased confidence seems to be returning in the major economies of China and India, which would bode well for the entire Asian region going forward."
Meanwhile, sales, employment and fixed investment outlooks were unchanged in first quarter. There was little movement from the previous quarter across the three major indexes in the survey, tracking sales, employment and fixed investment. The Employment Index for Asia slipped 0.3 point to 56.7, with 30% of CEOs forecasting an increase in headcount in the next 12 months.
However, the ASEAN CEOs were less optimistic as emerging economies struggled. Confidence within the ASEAN countries fell away in the first quarter of 2016, as emerging economies in the region continued to feel the full effects of the Chinese economic slowdown.
The YPO Global Pulse Index for ASEAN countries — Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar (Burma), Cambodia, Laos, Vietnam — fell 3.3 points to 56.9 in the first quarter 2016.