The MNI India Consumer Sentiment Indicator fell for the third consecutive month to 118.6 in July from 119.5 in June led by a weakening in personal finances.
Consumer confidence was down by 4.5 per cent on the year and all five components of the headline indicator were below their outturns a year earlier.
Consumer sentiment fell in five of the 10 major Indian cities surveyed, said the New York-headquartered MNI, a market intelligence subsidiary of the Deutsche Borse Goup.
This month’s (July) fall placed overall sentiment at the lowest level since March and not that far from the record low set in 2013, it noted.
The July survey shows that sentiment among Indian households remains fragile with consumers increasingly wary about their finances.
The Current Personal Finances Indicator fell for the third consecutive month to hit a record low of 110.3, leaving it 7.4 per cent down on the year.
This likely accounted for the less optimistic outlook for future household finances.
Inflation is also eroding consumers’ purchasing power and is expected to undermine confidence over the coming months. The Inflation Expectations Indicator is now up 10.8 per cent since the start of the year and 2.5 per cent above the outturn of July 2014.
Consumers revised up their outlook for the long-term business environment, even as their perception of the current business situation and their short-term expectations for it worsened as households probably expect the pace of reforms to be slower than they initially anticipated.
The Current Indicator, which measures consumers’ assessment of their current conditions, fell to 109.6 in July from 111.2 in June, the lowest since the series low witnessed in December 2014.
The Expectations Indicator also fell to 124.6 in July from 125.1 in the previous month, 4.7 per cent down on the outturn in the same month of last year.
Consumers’ views on jobs market also deteriorated this month as the Employment Outlook Indicator fell for the first time in four months to 119.3 in July from 122.7 in June.
The Stock Investment Indicator, a gauge of whether it is a good or bad time to invest in the stock market, fell to 114.5 in July from 123.2 in June. Sentiment surrounding the stock market has fallen significantly after hitting a record high in April.
The Real Estate Investment Indicator is one of the few indicators in the survey which has shown a slight uptick over the last year, led by rising house price expectations. In contrast, house buying sentiment has declined as respondents see it as a bad time to purchase a house, albeit it has started to recover slightly.
The Car Purchase Indicator rose slightly for the first time in five months to 84.9 in July from 84.6 in the previous month as slightly fewer respondents anticipated that gasoline prices would rise while their willingness to purchase a car in the next 12 months remained broadly stable, said MNI.
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