Consumer outlook dips to 46.6 from 46.9 in January 2016 says ZYFin's Consumer Outlook Index

MUMBAI: ZyFin’s Consumer Outlook Index ( COI) dipped to 46.6 during January’16 from 46.9 recorded during the previous month registering a marginalized decline of 0.6% (m-o-m). On an annualized basis the index gained 0.1% from 46.57 during the same period previous year. The index outlines weakening aggregate demand as consumers turn hesitant towards big-ticket purchases. Trailing borrowing comfort remains a primary concern as banks remain reluctant in transmitting the 125 basis points rate cut announced so far. On the other hand, consumers await the trickle down of the pay and pension hikes recommended by the Government.

The January survey also highlights a decline in willingness to spend on discretionary goods over the next six months, which may not bode well for consumer durables, automobiles and real estate. The Spending Sentiment Index stood at 39.4 during Jan’16 reporting a month-on-month decline of 4.1%. Debopam Chaudhuri, Chief Economist, ZyFin Research, said, “The sudden dip in confidence levels illustrates the short attention span of Indian consumers. It is crucial for confidence to be restored through effective expectations management. While economic recovery is a long drawn process, and results cannot be expected overnight, low consumer confidence can overturn all positive measures taken so far.”