Consumer sentiment of urban Indians dips to a 4-month low, shows data

Consumer sentiment has weakened for urban Indians in March 2024, according to the latest data from the Centre for Monitoring Indian Economy (CMIE).  

The index tracking consumer sentiments in urban areas reached a four-month low during the month. The decline follows a surge in 2023 that saw the urban index hit its highest level in 46 months in December 2023, reaching 101.83. The momentum has since waned, with the index declining for three consecutive months.

The overall index (urban and rural) has gained due to a notable improvement in sentiment across rural areas. Rural consumer sentiment is at its highest level thus far in 2024. 

Both rural and urban indices are lower than they were in 2019. The overall index is down 2 per cent in March 2024, compared to March 2019. It is down by 4.5 per cent for urban families, and 0.3 per cent for rural families, over the same period.

The recovery remains elusive across all the income groups in the country. The lowest income segment – earning less than or equal to Rs 1 lakh a year, has shown a decline of 7.1 per cent in consumer sentiment as of March 2024, compared to March 2019.

Similarly, those earning between Rs 1 lakh and Rs 2 lakh per annum, experienced a fall by 6.4 per cent, while the income group of Rs 2 Lakh and Rs 5 Lakh struggled with a decline of 5 per cent. Those earning between Rs 5-10 lakh per annum also have exhibited a dip of nearly three per cent. The highest income group – earning more than Rs 10 Lakhs, however, are the furthest apart, in terms of where they were in 2019.

Income expectations regarding the future well-being of families a year later, however, remain largely optimistic, with a net 21.49 per cent of households anticipating improved conditions for their household, compared to the preceding year. The net number reflects the difference between the share of those anticipating a better future minus the share of those expecting a worse situation in the future. Such optimism was last seen in January 2020, before the onset of Covid-19 pandemic.