The slow and steady pace of recovery of consumer sentiments in India since January 2022 continued into April, in which the index of consumer sentiments (ICS) rose by 3 per cent, according to the Centre for Monitoring Indian Economy (CMIE). This is similar to the low single-digit increases in the index seen since January this year, CMIE managing director Mahesh Vyas said.
The index had risen by 4 per cent in January, 5 per cent in February, 3.7 per cent in March and a lower 3 per cent in April. It is good to see a steady improvement in consumer sentiments month after month, but it is somewhat disquieting that the rate of improvement has been rather small and that it is getting smaller, Vyas, who is also the chief executive officer of CMIE, wrote on its website.
Rising inflation, creeping borrowing rates and elevated unemployment rates are weighing in on household sentiments. Perceptions of households regarding their current incomes and prospects of future incomes remain muted compared to the perceptions before the lockdown shock, he wrote.
As the Russia-Ukraine war keeps commodity prices high and central banks react to the prospects of higher inflation, in the coming months, the expectation is that inflation will remain high and interest rates will rise and employment growth will remain muted, he said, adding it is likely therefore that growth in consumer sentiments may be restricted to the current low single-digit levels.
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