MNI India Consumer Sentiment Indicator: India Consumer Confidence Rises in March - Higher Expectations Underpin Consumer Sentiment

Consumer sentiment rose to the highest since November last year led by more optimistic expectations for future finances and business conditions while sentiment towards spending took a backseat.
 
The MNI India Consumer Sentiment Indicator rose 2.1% to 111.2 in March from 108.9 in February. While sentiment remained above the 100 level, meaning optimists outnumbered pessimists, it was 6.1% down on the year and stands 5.4% below the last year’s average.
 
In the last 12 months, confidence has increased only four times and in spite of this month’s rise, sentiment towards current finances and the business environment in general remains weak. Views about the current situation fell to new historical lows, with the Current Indicator falling to 104.8, while the Expectations Indicator, which is made of three forward-looking components, rose to 115.5 from 111.4 in the previous month.
 
Consumers remained downbeat about the current business environment. The Current Business Conditions indicator fell to a new record low level. However, consumer expectations for future business conditions picked up. Business Conditions in One Year rose for the second consecutive month and that for five years rose to the highest level since September 2015.
 
Respondents’ assessment of household finances improved slightly, with the current measure rising above the 100 mark. More consumers cited higher income as the reason behind better finances and their attitude towards prices in general also improved. While the Current Prices Satisfaction Indicator remains well below 100, it was up 8.5% on the month. This probably also tempered inflation expectations among consumers, with the Inflation Expectations Indicator falling to the lowest level since February 2015.
 
Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, “Following the long decline over much of the past year, it is looking increasingly likely that consumer confidence troughed at the turn of the year. While still low, the rise in MNI India Consumer Sentiment Indicator in March, pushed it to the highest since November 2015. The survey, however, shows that consumers are still relatively concerned about the current state of their finances and the wider economy, with the rise in confidence driven by the expectation of better things to come in the future.”