Consumer sentiments in India rise slowly: CMIE

The index had risen by 4 per cent in January, 5 per cent in February, 3.7 per cent in March and a lower 3 per cent in April. It is good to see a steady improvement in consumer sentiments month after month, but it is somewhat disquieting that the rate of improvement has been rather small and that it is getting smaller, Vyas, who is also the chief executive officer of CMIE, wrote on its website.

Rising inflation, creeping borrowing rates and elevated unemployment rates are weighing in on household sentiments. Perceptions of households regarding their current incomes and prospects of future incomes remain muted compared to the perceptions before the lockdown shock, he wrote.

As the Russia-Ukraine war keeps commodity prices high and central banks react to the prospects of higher inflation, in the coming months, the expectation is that inflation will remain high and interest rates will rise and employment growth will remain muted, he said, adding it is likely therefore that growth in consumer sentiments may be restricted to the current low single-digit levels.

In April this year, 12.2 per cent of Indian households reported an increase in incomes compared to a year ago. This is close to the average proportion of households reporting an increase in income in recent months. The proportion of households reporting higher income since February 2022 has bumped up to a significantly higher level than the levels seen before. Similarly, there is a fall in the proportion of households who report a fall in their incomes, Vyas wrote.

Only 11.2 per cent believe it will do better over the next year and only 11.6 per cent believe it will do consistently well during the next five years, he added.

ALCHEMPro News Desk (DS)