IBR_Img_01The Indian economy has demonstrated resilience in the aftermath of the COVID-19 pandemic, experiencing a strong rebound, according to data from Grant Thornton's International Business Report (IBR), a global survey of mid-market companies. The survey conducted in H1-2023 (January-June 2023) shows that 78% of Indian mid-market businesses are positive about the country's economic prospects in the upcoming year. Notably, this level of optimism comes very close to the peak observed in the first half of 2019 (79%), just before the pandemic struck, falling short by just one percentage point. These growth expectations result from the Indian economy's resilience, where private consumption has become the primary driver of growth. The surge in private consumption has, in turn, energised production activities, leading to increased capacity utilisation across various sectors.

Expectations about India's economic growth trumps the global average

In H1-2023, optimism among businesses outpaced the global average of 67%. This suggests that the economic outlook in India is currently more positive than the global norm, potentially driven by a combination of domestic economic factors and policies that have created a conducive environment for growth and innovation. It is worth noting that, on the whole, optimism among global mid-market business leaders has improved, although with significant regional disparities.

% that are optimistic about the outlook for their economies over the next 12 months

Country/ Region/Sector H1 - 2023 H2 - 2022 H1 - 2022 H2 - 2021 H1 - 2021 H2 - 2020 H1 - 2020 H2 - 2019 H1 - 2019
India 78 56 75 77 74 71 63 69 79
Global 67 59 64 70 69 57 43 59 56


Businesses maintain high expectations of revenue & profitability

Given the government's emphasis on structural reforms and promoting a business-friendly environment, anticipations for revenue growth have sustained their upward trajectory. In H1-2023, 78% of businesses expect a surge in revenue, indicating a slight improvement from the 76% reported in the second half of 2022. Notably, these projections surpass the pre-Covid pandemic levels of revenue expectations.

% expecting an increase in revenue over the next 12 months

Country/ Region/Sector H1 - 2023 H2 - 2022 H1 - 2022 H2 - 2021 H1 - 2021 H2 - 2020 H1 - 2020 H2 - 2019 H1 - 2019
India 78 76 75 80 69 69 58 72 74
Global 60 56 58 57 57 45 34 54 53

Businesses also have a positive outlook on profitability, with expectations at 76% for H1-2023. This reaffirms the confidence of firms in their capacity to improve and boost profitability. Economic recovery, supportive government policies, increased Foreign Direct Investment (FDI), technological advancements, infrastructure development, and global supply chain realignment are key contributors to this growth outlook. 

% expecting an increase in profitability over the next 12 months

Country/ Region/Sector H1 - 2023 H2 - 2022 H1 - 2022 H2 - 2021 H1 - 2021 H2 - 2020 H1 - 2020 H2 - 2019 H1 - 2019
India 76 76 73 78 68 66 56 64 75
Global 59 55 54 57 56 44 32 54 51

Mid-market firms prioritise growth and technology


Business investment intentions for H1-2023 reveal a dedicated focus on expansion and modernisation. This commitment is evident in the number of businesses expecting an increase in investment in new buildings (62%), plant & machinery (63%), staff skill enhancement (69%), research and development (69%), and technology. Investment in technology (73%) takes precedence, highlighting a commitment to maintaining technological competitiveness.

There is also an upward momentum in jobs, with 69% of business leaders respondents expecting an increase in employment opportunities in H1-2023. This figure is relatively high compared to the global average, where only 50% of mid-market businesses expect increased employment opportunities.

Persisting business challenges mitigated by Government policies

India's economy, while demonstrating impressive resilience, faces challenges in pursuing growth for businesses. These substantial challenges are currently being addressed through governmental policies and industry-driven initiatives. Notably, there has been a slight reduction in the percentage of firms citing economic uncertainty as a constraint, decreasing from 73% in the first half of 2022 to 68% in H1-2023. This shift indicates a positive trend toward improved economic stability and growth.

Key constraints for H1-2023

While India's economic outlook remains optimistic, the global economic prospects for the upcoming year are clouded by challenges, including increased inflation, ongoing supply chain disruptions, and rising geopolitical uncertainty. Nevertheless, India's ongoing growth trajectory is supported by a series of structural changes that have been put in place, such as Aatmanirbhar Bharat and digitalisation. The year ahead is poised for growth, underpinned by strong domestic demand and increased capital investments. As the IBR data indicates, India's resilience and adaptability will continue to fuel its journey toward sustained economic growth.

About IBR

The International Business Report (IBR) is the world's leading survey of mid-market companies. The research takes place twice a year and involves interviews with chief executive officers, managing directors, chairpersons, or other senior executives from all industry sectors.

Source for infographics: Grant Thornton IBR


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