Consumer confidence in India has declined for the first time in nine quarters due to weak employment sentiment and subdued spending behaviour, according to Nielsen global consumer confidence index released on Tuesday.
“The drop from the top position for India after nine quarters indicates a growing anxiousness amongst consumers today in relation to the job prospects and spending habits,” Nielsen India region president Piyush Mathur said.
India registered a decline of four points in the index to 119 from the first quarter of 2012. The country is at No. 2 in the most-confident countries in the world. “The four-point fall is fairly significant. Now we are going below 120 points. The sentiment is not where it used to be. Rising inflation and fuel prices, which are a direct hit on the wallet, combined with a comparatively low GDP and fall of the rupee have taken a toll on consumer confidence,” Mathur said.
Elaborating further, he said: “There is some correlation between GDP and consumer confidence. In the second quarter of 2011, our GDP growth started going below 7 per cent mark. Over the past four quarters, we have been gradually sliding down. The confidence level slipped by five points to 126 in the second quarter of 2011. The sentiment seems to be bearish below the 7 per cent GDP mark.”
According to the report, the average global confidence index has declined by three points to 91. The lowest point in last seven years since Nielsen started compiling the data was in the second quarter of 2009.
“This 91 is like the recovery that started in quarter four of 2009. It was a feeling of coming out of the recession. It is not peak recession at a global standpoint,” he said, adding that a figure below 100 points indicates pessimism.
India still ranks at the top when it comes to job prospects, but the index has declined by seven points to 77 during the quarter, he said.