A fifth of urban Indians worried about cost of goods, services rising: Survey

NEW DELHI: Urban Indians expect cost of living to rise over the six months, prompting them to spend less on socialising and postpone big-ticket purchases, according to India-specific findings of the Ipsos Inflation Monitor 2022.

Several of those surveyed expressed concerns about their personal finances, with 79% concerned about the cost of goods and services increasing over the next six months, 73% concerned about their ability to pay gas and electricity bills, researcher Ipsos said on Tuesday. Nearly 70% expressed concerns about their ability to pay bills, 68% worried about their ability to buy things that they are used to buying, and 67% were concerned about the value of their home, among others.

As a result, urban Indians expect tangible impact on their household spends in the next six months - 74% expect their cost of food shopping to increase, 72% expect their cost of utilities such as gas and electricity to increase, 72% expect their motoring fuel cost (of petrol, diesel or gasoline) to increase, 70% expect cost of other household shopping to increase, among others.

“Cost of living is increasing due to the prolonged pandemic, global economic slowdown and the continuing War in Ukraine even in India, though the urban consumer is better placed financially, to deal with it. In smaller towns, the impact would be felt a lot more. But if we look at the future outlook, fear around rising household expenditure, utilities, ability to pay bills in the future is increasing and real. Also citizens polled expect inflation, interest rates, taxes to increase. Even unemployment could further increase, is the fear of more urban Indians, for the next 6 months,” said Amit Adarkar, CEO, Ipsos India.

About 25% of urban Indians surveyed said they were living comfortably, 29% said they were doing alright, 24% said they were just about getting by. On the other hand, about 13% said they were having difficulties coping with their financial conditions, and 8% were finding it very difficult, Ipsos said.

Urban Indians also expect their cost of living to go up during the remainder of the year.

Of those surveyed, 35% believe inflation will rise a lot, 33% say it will rise a little, 15% say it will stay the same and 14% say it will fall a lot. Fewer of those surveyed, or 7%, said their standard of living could fall a lot during the remainder of the year. About 22% of those surveyed expect interest rates to rise a lot, 35% feel will rise a little, 22% said they expect it to stay the same and 16% feel will fall a little or a lot.

A smaller section of those surveyed, or 9%, said their disposable incomes will fall a lot and 11% said it will fall a little, but majority were optimistic. While 48% believed their disposable income will rise a lot, and 27% felt it will stay the same.

As per Ipsos, 40% of urban Indians it surveyed said they would spend less on socialising, 38% said they would delay large purchase decisions, for example on furniture and cars,, 38% would spend less on holidays, 32% would spend less money on other household shopping, 32% would use savings, 31% would use a car or motor less often, to save on fuel costs. “Urban consumers believe they will need to cut back on discretionary spends to survive in the tougher macro environment, if it worsens in the next six months,” Adarkar said.