Mumbai: Equity investors may be sporting broad smiles these days but Indian consumers have been a more glum lot, thanks to job loss fears and rising food prices.
The CNBC-TV18 Boston Analytics Consumer Confidence Index survey for July shows that consumer confidence continued to fall in July.
The index currently stands at 71.9 compared with 72.8 in June.
The fall in consumer confidence in July can be attributed primarily to pessimism about employment conditions, concern about inflation and weakening sentiment related to discretionary spending.
The consumer spending component of the CNBC-TV18 Boston Analytics Consumer Confidence Index fell 6% in July, down for the fifth consecutive month. Ahmed Raza Khan / Mint
Sentiment related to some aspects of personal financial conditions such as observed and expected household income as well as comfort in borrowing money improved slightly in July, but not enough to offset the negative trends.
The consumer spending component of the index slipped 6% in July, down for the fifth consecutive month. This is an uncomfortable factor for Indian companies which are cutting prices and offering discounts to pump volumes, though they seem to be making little progress.
There are significant concerns about inflation. Only 7.4% of the respondents were optimistic about a drop in price levels. 55% of the respondents were worried that interest rates will rise.
The CNBC-TV18 Boston Analytics Consumer Confidence Index consists of two sub-indices—the Current Situation Index and the Future Expectations Index.
The Current Situation Confidence Index recorded a 3.5% gain from 71.7 in June to 74.2 in July. The Future Expectations Confidence Index dropped 2.9% to its lowest level, from 73.3 in June to 71.2 in July.
The CNBC-TV18 Boston Analytics Consumer Confidence Index is the largest and most comprehensive index in the world derived from monthly interviews of nearly 10,000 respondents across 15 Indian cities.