- The Genesis India Consumer Indicator (GICI) increased slightly to 60.45 in May from 59.04 in April.
- The continued rise in consumer sentiment highlights the growing strength of the economy. The jump in Q4 (Jan-Mar) sentiment came well ahead of the latest GDP data which showed growth at 7.7% on the year in the same quarter, the fastest for nearly two years. The increased optimism of consumers in both April and May points to continued strong growth in the Apr-Jun quarter.
- Out of the five components that comprise the GICI, the three measuring current conditions increased while the two measuring future conditions fell marginally, but remained at high levels.
- Respondents’ views on current business conditions increased significantly for the second consecutive month to 38.41 from 33.87. Consumers were also more upbeat about their current household finances with the indicator increasing to 54.09 in May from 50.66 in April.
- There was continued improvement in attitudes towards real estate in April. The Real Estate Indicator, which measures whether people think it’s a good time for people to buy real estate, increased for the fourth consecutive month to 52.44 from 51.7. This was the second consecutive month it has been above the 50 breakeven level, indicating that optimists now outnumber pessimists.
- The percentage of respondents who have shopped online in the past three months fell for the second consecutive month to 37% in May from 38% in April. Respondents were less likely to purchase electronic items but more likely to make clothing purchases online.
Chief Economist of GMMR, Philip Uglow, said “The recent pick-up in consumer sentiment tallies with the more positive economic data seen in recent months, notably the latest GDP data which showed growth close to a two year high.”
“Increased consumer sentiment, higher growth and a pick-up in inflation all suggest the RBI’s Monetary Policy Committee will move to a more hawkish footing at the upcoming June meeting.”