Consumer sentiment hits record low in Sept: Survey

Domestic consumer sentiment in September dipped to its lowest level since November 2012 as households were increasingly pessimistic about their finances amid sluggish demand conditions, a Deutsche Borse survey said.
The MNI India Consumer Sentiment Indicator fell 3.2 per cent to 115.3 in September from 119.1 in August, the lowest level since the survey began in November 2012.
While the indicator remains above the 100-point mark, which separates optimists from pessimists, it has been gradually trending down since last year, suggesting that demand continues to remain sluggish.
"Most observers tend to agree that the long-term outlook for India is positive, with equity markets having taken their cues from a wave of Modi optimism.

"Seen through the eyes of our survey respondents though, the short-to-medium-term outlook looks less compelling, with consumer confidence at a record low and little sign of a quick turnaround," MNI Indicators Chief Economist Philip Uglow said.
The survey respondents were the least optimistic about their household finances, with both current and future measures of personal finances falling to record lows.

Reserve Bank Governor Raghuram Rajan on September 29 effected a more-than-expected interest rate cut of half a per cent to boost the economy.
"So far the rate cuts have had little impact, with consumers particularly concerned about their finances. The recent cut in the policy rate by the RBI should help, although for now our survey suggests that household spending will remain capped," Uglow added.

The report further noted that ahead of the key festival season, consumers were a little more optimistic about purchasing big-ticket items. Still, the durable buying conditions Indicator was lower than the level normally expected, given the time of year.
Going forward, expectations for business conditions in one year fell to 115.5, the lowest level since September 2013 when India was in the throes of a currency crisis.
RBI had also lowered its economic growth forecast for the current fiscal to 7.4 per cent from its previous projection of 7.6 per cent.
The April-June quarter GDP slipped to 7 per cent from 7.5 per cent in the preceding quarter.