Consumer sentiment in India continues to decline: survey

Customized knowledge services company Boston Analytics released the Boston Analytics Consumer Sentiment Index (BACSI) for India results for the month of July. The past month registered a marginal 3.8% decrease in the BACSI, a monthly barometer of Indian consumer opinion regarding the current state and future expectations of the macro economy, household financial conditions and consumption.

The index is based on a monthly survey targeting a diverse set of demographics representative of Indian consumers. In an effort to capture the country’s heterogeneity, the BACSI’s July survey has been extended in terms of both geographic coverage and sample size with the inclusion of Hyderabad.

The survey is now conducted across five cities—Delhi, Mumbai, Kolkata, Chennai, and Hyderabad—targeting a diverse set of demographics representative of Indian consumers. It addresses macro-level variables reflecting the nation’s economic conditions, including indicators such as employment, inflation, interest rates and real estate.

The BACSI also studies micro-level variables such as household income, commitment towards expenditure on basic necessities (durables, automobile, and house), savings and other elements.

The BACSI for the month of June stood at 93.2, down 3.8% from the previous month’s reading of 96.9. Disaggregation of the data reveals that the primary drivers of the decline in consumer sentiment were decreases in respondents’ confidence in the economy and in employment conditions. Sentiment related to inflation remained pessimistic but improved relative to the June reading, most likely due to the government’s highly visible campaign to combat inflation. Despite the overall composite sentiment index trending down, the consumer spending component remained strong in July.

"It appears that overall consumer sentiment in India is trending lower in a gradual manner, unlike the dramatic declines in consumer sentiment being reported in the United States and Europe," said Sam Thomas, Ph.D., Boston Analytics’ director of research and development. "It is also notable that despite a worldwide slowdown in consumer spending, and continued concerns about inflation, Indian consumer attitudes toward spending remain optimistic, reflecting an upward trend in the BACSI since May."