CONSUMER SENTIMENT TAKES A HIT
SURVEY AFTER SURVEY SHOWS THAT CONSUMERS ARE FEELING GLOOMY ABOUT THEIR PROSPECTS. THAT IS SOMETHING THE GOVERNMENT SHOULD WORRY ABOUT.
Survey after survey shows that consumers are feeling gloomy about their prospects. that is something the government should worry about.
WHO IS FEELING good about the economy? Not consumers for sure. All recent consumer confidence surveys have largely reiterated that point. The Reserve Bank of India Consumer Confidence Surveys are probably the most methodical in tracking consumer sentiments. The survey is done quarterly and it involves a sample of over 5,000 consumers in over 10 cities. The RBI consumer confidence surveys track both current sentiment as well as expectations of the future (Future Expectations Survey). For some time now, the sentiment about their current conditions have been low. The expectations of how their lives will be a year hence is also not particularly cheerful, though it is better than most people’s current sentiments.
A second survey – monthly and with a smaller sample – the Thomson-Reuters/ Ipsos Indian Primary Consumer Sentiment survey also shows similar trends about the current situation. Though it is more in the nature of a dipstick study, it does show a worsening sentiment which should worry the government. Meanwhile, Consumer Sentiment as studied by CMIE is also showing a worsening trend.
Given that consumer spending was one of the big drivers of current growth (the other being government spending), the worsening consumer sentiments do not augur well for the economy.