The MNI India Consumer Indicator declined in January to the lowest level since October, driven by a fall in consumers’ intentions to purchase a large household item.
The Consumer Indicator fell to 121.2 in January from 123.9 in December, a decline of2.1% on the month. While January’s fall was partly seasonal, following the festive period, sentiment was still down 4.8% compared with a year earlier, underlying the economic weakness that India has seen over the past 12 months.
Four out of the five components which make up the India Consumer Indicator fell in January. The only component to increase was Business Conditions in a Year, although it was almost 8% down compared with the same period last year.
The Durable Buying Conditions Indicator fell 8.2% on the month to 106.0, and was6.2% below the level seen in January 2013, highlighting the squeeze on household income over the past year.
Respondents were still very dissatisfied with the current level of prices, while inflation expectations remained at an elevated level.
Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, “There was a welcome pick-up in confidence over the recent festive period, but the fall in January leaves sentiment down nearly 5% on January last year.”
“Consumers remain concerned about the continued high level of inflation which has squeezed disposable income over the past year and don’t see an end to high prices any time soon. Hopes are running high that the elections in May will see a new government drive through economic reforms and policies to lift India out of its currentmalaise.”
