The MNI India Consumer Indicator rose for the third consecutive month in December to the highest since May, as consumers reported that it was a better time to purchase a large household good and that they expected their finances to improve in the future.
The rise of 1.1% on the month took the India Consumer Indicator to 123.9 in December from 122.5 in November, although confidence was down 4% on the year.
Part of the rise may still be seasonal, with sentiment having picked up during the recent festive season. Consumers continued to see it as a good time to purchase a large household durable or a car due to continued discounting in December.
Some respondents, though, were looking positively ahead to the possible change of government at the elections in 2014 as a catalyst for economic change and lower inflation.
Both current and future measures of confidence improved for the third consecutive month, having hit record lows in September.
Concerns over current prices and expectations for inflation in a year’s time eased in December having hit record levels in November, a tentative sign that the sharp increase in inflation seen this year could be nearing a peak.
Commenting on the latest survey, MNI Indicators Chief Economist Philip Uglow said, “Consumer confidence continued to recover in December from the September low. Part of the rebound still looks seasonal but it also reflects a stabilisation in the economy compared with the summer.”
"2014 has been a tough year for India, given rising prices and weak growth. Respondents were still concerned about the current level of prices but to a lesserextent than in November, a tentative sign that inflation may have peaked,” he added.
