Consumer sentiment in India deteriorated in the first quarter of 2016 with consumers getting more pessimistic about the future than they were at the start of the year, according to a new index formulated by the Centre for Monitoring Indian Economy (CMIE).
The CMIE Consumer Sentiments Index, which was introduced in January, shows that consumers' economic conditions, sentiments, and expectations of what the future holds, have all been on a declining trend from January to March.
“Consumer sentiments dampened in March 2016. Sentiments have been deteriorating since January,” according a statement from the CMIE.
“The index of consumer sentiments declined by 2.2 per cent compared to its level in February. It was also 5.3 per cent lower than its level in January.”
Economic reality“This needs to be seen over a larger time period. At the time the government was formed, sentiments went up,” D.K. Joshi, Chief Economist at Crisil told The Hindu. “Then they corrected, realigning to the economic reality.” “In this last quarter, poor industrial performance, poor monsoon, both led to sentiments dying down,” he added.
“If you look at the RBI and government of India, their projections are not too different from the previous financial year,” Madan Sabnavis, Chief Economist, Care Ratings said. “So, they are indicating that there will be a marginal improvement this year, or maybe even a flat performance.”
The index of consumers’ current economic conditions was 4 per cent lower in March than it was in January and 1.4 per cent lower than what it was in February.
