Consumer sentiments in India fell for the fourth consecutive month in December to the lowest on record, as consumers reported a further deterioration in their personal finances amid rising inflation, a Deutsche Borse report said.
The MNI India Consumer Sentiment Indicator fell 4.6 per cent to 108.5 in December from 113.7 in November. While sentiment remains above the 100 level, meaning optimists still outnumber pessimists, it has fallen 9.3 per cent over the past year.
“Confidence has been in trend decline over the past year and has fallen sharply since April in spite of aggressive action from the central bank to boost economic growth, questioning just how solid the economy is,” the report said.
Respondents saw little hope of a turnaround either, with expectations for the future falling sharply.
“The continued decline in consumer sentiment serves as a warning that all is not well in the Indian economy and leads us to question in part the strength of the official GDP data,” MNI Indicators Chief Economist Philip Uglow said.
“Our data shows clearly that household finances are under significant pressure with the outlook for the job market deteriorating further,” he said.
The survey further noted that there was significantly less optimistic about the job market over the next 12 months, with the employment outlook Indicator falling 7.4 per cent on the month to the lowest level since the start of the survey in November 2012.
Moreover, there was a drop in confidence in household finances, with both current and future measures falling to record lows.
Almost 94 per cent of respondents said they used the majority of their income on daily expenses, with very little left to save or invest. “Rise in inflation has made matters worse with consumers increasingly dissatisfied with current prices,” the survey said.
Consumers also revised down their expectations for business conditions and were more downbeat in their perception of the current business environment in December.