Mumbai: Consumer confidence remains low, runing counter to hopes that the worst is over for the economy, shows a survey conducted before the end of the 15th general election, which delivered a mandate for a stable coalition government and led to a stock-market surge.

The CNBC-TV18 Boston Analytics Consumer Confidence Index, a leading indicator of the economy, fell 4.2% from 74.1 in April to its lowest levels of 71 in May. This eclipsed the “pessimism is over” scenario that emerged from the April reading, which had inched up 0.8% from March.

The March and April surveys had created the impression that consumer pessimism was waning and that consumers, while they were wary of the current situation, believed the future would be better. But in May, even the future expectations component of the confidence index dropped considerably.

The survey was conducted in the first week of May, before the declaration of election results on 16 May brought the Congress party-led United Progressive Alliance coalition back to power. The election verdict gave the coalition a free hand to pursue reforms and measures to revive slowing economic growth.

However, the survey included several direct questions that may not necessarily have any direct impact on the readings. Also, almost all components of the index dipped in May as consumers continued to be pessimistic about the employment outlook, job security, inflation and economic conditions.

A ray of hope was provided by an increase in spending on essential items, compared with previous months. However, spending on consumer discretionary items—products that people buy that they do not necessarily need—continued to fall.

cnbctv18@livemint.com