Consumer sentiment index falls 3.8% in April, sharpest drop since May 2020: CMIE



The raging second wave of Covid-19 has resulted in a 3.8% dip in the index of consumer sentiment in April, the sharpest fall since May 2020, said the Centre for Monitoring Indian Economy.

Week-on-week the decline in the consumer sentiment index has been steeper with the index falling by 5.4% in the week ended May 2, bringing the weekly index to its lowest since November 2020. The index of consumer sentiments fell by 4.3% in the week ended April 18 and by 4.5% in the week ended April 25.

As per CMIE weekly analysis, while the index of current economic conditions fell by 2.5% the index of consumer expectations fell by 4.5%.

“The fall in consumer sentiments in April reflects a substantial worsening of household income,” CMIE said. As per CMIE survey, 47% respondents said their income was worse than a year ago compared to 45% in March, reflecting rise in pessimism.

Even the proportion of respondents saying their income had improved compared to a year ago declined from 6% to 4% during the same period. “So perceptions on household incomes worsened at both ends of the income distribution of households,” it said.

According to CMIE, there is heightened pessimism regarding the future, regarding their incomes over the next 12 months, regarding the economy in the next one year and also regarding the next five years.

CMIE survey says nearly 46% of the responding households expect their incomes to worsen in a year’s time compared to less than 10% of the households expecting income decline before the pandemic. “There is persistence in this pessimism and it is stark in household perceptions regarding their future compared to their current conditions,” it said.

Further, about 45% of the respondents believed that economic conditions in India are going to worsen over the next one year. Only 6% believe it will improve, while the remaining 49% believe it will remain unchanged.


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