Consumer sentiment regarding personal finances, business and buying conditions remained stable in June despite a rate hike by RBI, as consumers said they are benefitting from the revival in growth, says a report.
The GICI (Genesis India Consumer Indicator)- a monthly indicator tracking consumer sentiment pan India across personal finances, business conditions and buying conditions – remained broadly stable at 60.00 in June compared with 60.45 in May.
A result above 50 indicates that respondents are optimistic while a reading below 50 indicates that pessimists outweigh optimists.
“Despite the hike in interest rates by RBI at the start of June, consumer sentiment remained broadly unchanged month-on-month, with consumers still relatively upbeat. Confidence is up significantly since the start of the year as consumers are benefitting from the revival in growth,” GMMR Chief Economist Philip Uglow said.
Genesis Management and Market Research (GMMR) compiles GICI index.
In June, the Reserve Bank had upped its retail inflation projection by 0.30 per cent and kept the policy stance in the neutral zone, even as it hiked the key rate by 0.25 percent to 6.25 percent.
A quarterly analysis shows that consumer confidence rose significantly in the June quarter to 59.83 from 54.39 in March quarter, with all components of the indicator posting an increase.
As per the report, the improving economic backdrop bodes well for the automotive sector.
“Buying conditions for consumer durables are firm and automobile manufacturers should benefit from an increased proclivity for car purchase among our respondents,” Uglow added.
According to government data, Indian economy grew 7.7 percent in January-March 2018, the biggest expansion in seven quarters, on account of robust performance in manufacturing, construction and service sectors as well as good farm output.
