BIZ~COM
Indian consumers have, in general, become more optimistic about the state of the economy. Both the Reserve Bank of India’s (RBI) consumer confidence index and Centre for Monitoring Indian Economy’s (CMIE) consumer sentiment index showed a marked improvement in the past two months.
The onset of the festive season has also given a boost to consumer confidence. Most of the high-frequency indicators have performed better in the first half of the current financial year. The data for the latest month show a continuation of the growth momentum, however areas of concern from the manufacturing and the rural sector remain.
Consumer confidence rose to the highest in four years, according to RBI’s survey.
The current situation index, capturing the current situation, jumped from 88.10 in the July survey to 92.20 in the September survey. With this jump, the current situation index has reached the levels seen during the pre-Covid period.
Interestingly, urban consumers have been more optimistic about their future even during the Covid period when their immediate economic environment was challenging. In recent months, the shedding of the pessimism on the current situation has led to narrowing of the gap between the current assessment and future expectations.
A key gauge of India’s manufacturing activity, the Purchasing Managers’ Index (PMI), saw the slowest rate of expansion in October. The index was at an eight-month low of 55.5 as compared to 57.5 in the previous month. The slower growth was mainly on account of weaker demand for certain products.
