With a drop of 3.1 percentage points in August 2019, the losing confidence among urban Indians is evident.
Amid a persisting economic slowdown, consumer confidence has fallen and pessimism prevails for spending, investment, and jobs. With a drop of 3.1 percentage points in August 2019, the losing confidence among urban Indians is evident, according to a recent survey. “Urban Indians are feeling less confident about the economy and jobs and further, there is a bit of a tightening in personal spending and investments for the future,” Parijat Chakraborty, Country Service Line Leader, Public Affairs & Corporate Reputation, Ipsos India said on Thursday. However, it is not just the dismal state of the Indian economy that is resulting in this. “Macroeconomic factors (both global and local) are definitely impacting the mood, making the indicators drop, month on month,” Chakraborty added.
The consumer sentiment has been on a downward trend since May 2019, except for a marginal improvement in July 2019. For August, the PCSI (Primary Consumer Sentiment Index) is downbeat across all the four parameters viz the PCSI Employment Confidence (Jobs), the PCSI Economic Expectations (Expectations), the PCSI Investment Climate (Investment) and the PCSI Current Personal Financial Conditions (Current Conditions). The survey, which was conducted on Upper-deck consumer citizens, may not be reflective of the general population. However, “the online sample is particularly valuable in its own right as the respondents are more urban, educated and have more income than their fellow citizens,” Ipsos-Thomson Reuters said. The situation could be even worse for the rural segment which has led the slowdown for FMCG companies.
The results of the Ipsos-Thomson Reuters survey are in line with the slowdown in FMCG and auto sales. However, the current state of the economy is likely to stay for some time as the RBI Governor Shaktikanta Das said that there is “clear evidence of domestic demand slowing down further,” he said in the MPC minutes of the Reserve Bank of India’s August meeting on Thursday. The government now plans to bolster dwindling domestic demand and support investment activity on priority.