India's consumer confidence worsens in May as Covid hits sentiment

The consumer confidence in India has further weakened in May amid the severe Covid crisis and the resultant lockdowns across states.

The monthly Refinitiv-Ipsos Primary Consumer Sentiment Index (PCSI) for India, in May, has shown a sharp drop of 6.3 percentage points, over April 2021, amid Covid-19 fears.

The monthly PCSI, which is driven by the aggregation of the four weighted sub-indices, has plunged across all sub-indices. The PCSI Employment Confidence Sub-Index is down by 4.7 percentage points, the PCSI Current Personal Financial Conditions Sub-Index has steeply fallen by 9.0 percentage points.

Further, the PCSI Investment Climate Sub-Index has sharply declined by 8.4 percentage points and the PCSI Economic Expectations Sub Index, has decreased by 4.4 percentage points.

Amit Adarkar, CEO, Ipsos India, said: "The second wave has been far greater in intensity as compared to the first wave and we are seeing its terrible impact not only on our healthcare infrastructure, which is stressed due to the steep surge in cases, but also on consumer sentiment, which has plummeted across the four sub-indices. Especially for personal finances, for day to day running of household expenses and savings and investments for the future."

Confidence around jobs and the economy too have taken a hit and right now, the government's focus is to contain the virus and save lives. And that is why we are seeing lockdowns and restrictions being imposed. But then it is also impacting livelihoods and earnings, he said.

"It is a tough dilemma but saving lives will take precedence over everything else and then of course expediting the vaccination drive, with now Sputnik V too making the India debut. We will have to closely watch the Covid trajectory over the next 3-4 weeks and gauge if restrictions are being lifted from June onwards. If it does not happen and vaccination drive does not pick up pace, we are looking at a very slow rebound."