Households increasingly pessimistic about their finances
The MNI India Consumer Sentiment Indicator fell 3.2% to 115.3 in September from 119.1 in August, the lowest level since the survey began in November 2012.
While the indicator above the 100 level separates optimists from pessimists, it has been gradually trending down since last year suggesting that demand continues to remain sluggish in the country, it said. Lacklustre domestic demand was cited by the Reserve Bank of India as part of the rationale for its 50 basis point interest rate cut at the September monetary policy meeting.
While the sharp rise in domestic stock prices since the start of 2014 is testament to the growing confidence investors have in India’s economic prospects, it is not a view shared by urban consumers, said London-based research firm MNI Indicators. Respondents were the least optimistic about their household finances, with both current and future measures of Personal Finances falling to record lows.
Ahead of the key festival season, consumers were a little more optimistic about purchasing big-ticket items. Still the Durable Buying Conditions Indicator was lower than would normally be expected given the time of year, averaging 109.7 in the three months to September, five points below its respective outturn a year ago, it said.
Respondents revised down their expectations for business conditions sharply and were more downbeat in their perception of the current business situation as a result of the weaker global environment. Expectations for Business Conditions in One Year fell to 115.5, the lowest level since September 2013 when India was in the throes of a currency crisis.