Rate Cut Fails to Boost India Consumer Sentiment
MNI India Consumer Sentiment Indicator Stable in June
MUMBAI, India, July 2, 2015 /PRNewswire/ -- The MNI India Consumer Sentiment Indicator remained stable at 119.5 in June compared with 119.6 in the previous month, with the Reserve Bank of India's latest rate cut failing to provide a boost to consumer confidence.
Consumer confidence now sits 5.3% down on the year, with all five components of the Consumer Indicator below their respective outturns a year earlier. The three interest rate cuts by the RBI in 2015 appear to have helped halt the trend decline in confidence, with the MNI India CSI remaining broadly stable after falling more than 5% between June and December last year. The latest rate cut of 25 basis points on June 2, however, has not yet trickled down to consumers, though the sequential easing could have some upward impact on consumer sentiment over the coming months.
The June survey showed that consumer sentiment remains fragile with consumers increasingly wary of their finances and less inclined to make big-ticket purchases. The Current Personal Finances Indicator fell by 2.9% to 114.4, the lowest since January. In turn, Durable Buying Conditions eased to a three-month low.
One positive outcome from this month's survey was that consumers were significantly more optimistic about employment conditions over the next 12 months. The Employment Outlook Indicator rose for the third consecutive month as more than 50% of respondents expected the job market to improve. This followed our June business sentiment survey which showed companies increasingly likely to hire over the coming months.
Sentiment towards real estate has strengthened since last year as more respondents have expected house prices to rise in the next six months. High mortgage costs, though, have kept house buying sentiment in check.
Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, "It is encouraging to see that consumer sentiment has stabilised following the decline throughout 2014. Lower rates from the RBI have helped in this respect, although have so far failed to provide a resounding boost. There are, though, some positive takeaways with the employment outlook improved and current and near-term business conditions trending higher in recent months."
For further information, please contact:
Naomi Pickens
Public Relations
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Editorial Content:
Philip Uglow
Chief Economist, MNI Indicators
Notes to Editors
Please source all information to MNI Indicators.
The MNI India Consumer Sentiment Survey is a wide ranging monthly survey of consumer confidence across India.
Data is collected via telephone interviews. At least 1,000 interviews are conducted each month. The survey has been in place since November 2012.
The survey adopts a similar methodology to the University of Michigan survey of U.S. consumer sentiment.
The main MNI India Consumer Indicator is derived from five questions, two on current conditions and three on future expectations:
- Current personal financial situation compared to a year ago
- Current willingness to buy major household items
- Personal financial situation one year from now
- Overall business conditions one year from now
- Overall business conditions for the next 5 years
Indicators relating to specific questions in the report are diffusion indices with 100 representing a neutral level, meaning positive and negative answers are equal. Values above 100 indicate increasing positivity while values below show increasing negativity.
About MNI Indicators
MNI Indicators, part of Deutsche Börse Group, offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets.
For more information, visit our website at www.mni-indicators.com.
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