India's urban consumers remained pessimistic in May despite modest improvement from the previous month amid rising concerns over inflation and uncertain economic outlook, results of a survey by showed Wednesday.
The Consumer Confidence Index (CCI) rose to 41.7 from 41.1 in April, indicating a very slight improvement in the present economic situation, the Mumbai-based financial information company BluFin Advisors revealed.
A score between 25-50 indicates that consumers are slightly pessimistic. After hitting a low of 35.8 in December, the index has climbed steadily. The latest improvement in the index was driven by the declining pessimism about the current state of affairs, while expectations on future situation turned weaker.
"The slight sign of improvement that the CCI numbers was showing seems to have come to a standstill," BluFin CEO Rashid Bilimoria said. "The current economic upheaval and the global scenario has left the consumer in a 'wait and watch' mode."
"We need to watch for the next months numbers to know if this is a beginning of a negative trend or is just a temporary pause," he added.
The CCI reflects how typical urban consumers feel about the current economy and its prospects, and hence how likely they are to spend. The survey is carried out by BluFin and market research group TNS by interviewing 4,000 people across 18 Indian cities.
Among the two-component indexes of the CCI, the future expectations index declined to 38.3. Meanwhile, the present situation index improved to 49.2 from 47.3.
However, consumers are likely to sit tight on spending in the coming months. The spending sentiment sub-index shed 3.8 percent to reach 27.2. The slight upswing that was observed on the purchase of big ticket items last month has vanished and there has been a marked disinterest from the consumer in borrowings for purchases, the survey found.
Indicating consumers' growing concern over inflation, the inflation sentiment sub-index fell 1.5 percent to 25.8.
On the other hand, consumers were less pessimistic about their employment situation with the employment sentiment sub-index at 48. Despite a decline in the current job outlook, consumers were slightly positive about retaining their jobs.
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