CII’s 120th edition of the Business Outlook Survey indicates a moderation in business confidence as the index slipped to the level of 62.2, after peaking to a one-year high of 66.9 in the last quarter, as concerns around the impending recession seem to have weighed on business sentiment.
More than half of the respondents now foresee growth in the 7.0% to 8.0% range during FY23 as inflation expectations remain high, with exactly half of the respondents anticipating inflation to remain above the central bank limit of 6% during the year.
Given the sustained price pressures, majority of the respondents expect further hike(s) in policy rates during FY23.
In the current conditions, where businesses are facing high input costs on all fronts, credit too, more than two thirds of the respondents foresee that their profit margins may be under pressure for about a year.
However, on the upside, majority of the respondents anticipate better festive season demand in FY23 vis-à-vis FY22.