As per the CMIE, the 30-day moving average ICS as of June 26 was 1.3% higher than its level as of May-end after 3.7% dip in March, 3% fall in April and 0.8% decline in May.
Though the index of consumer sentiments had grown by 4% and 5% in January and February 2022 respectively, the ICS of May 2022 was still 35.7% lower than its level in February 2020 with households being worst hit, the CMIE said in its weekly labour market analysis.
“Consumer sentiments have been recovering, but at a very slow pace. Worse still, this recovery has been decelerating in recent months and is skewed in favour of the rich,” CMIE said.
“The slowing down of consumer sentiments can delay the recovery in private final consumption expenditure and the disparity in its recovery has implications on the nature of the recovery,” it added.
According to CMIE, poorer households have seen a much slower recovery in consumer sentiments compared to the well-off households. While the overall ICS in May 2022 was 35.7% lower than its pre-pandemic level in February 2020, the ICS of households with incomes of less than Rs 1 lakh per annum was 46%lower.
The ICS of households with an annual income between Rs 1 lakh and Rs 2 lakh was 40.4% lower, those with incomes between Rs 2 lakh and Rs 5 lakh per annum saw the ICS fall by a lower 31.2%, those with incomes between Rs 5 lakh per annum and Rs 10 lakh saw the ICS fall by 30.7% and the lowest fall in the ICS is of households with income of more than Rs 10 lakh per annum at 25.2% lower than in February 2020.
As per CMIE, this income disparity in consumer sentiments got sharper in May 2022 with the lowest rung saw sentiments declining by a substantial 8.2% while those with incomes between Rs 5 lakh and Rs 10 lakh per annum witnessing a jump of 18% while those with annual income in excess of Rs 10 lakh saw their ICS go up by 19.4%.
“Household expectations from the future are muted. Job prospects are not getting any better for the vast majority, inflation has been high and interest rates have been rising. The southwest monsoon got off to a patchy start and kharif sowing is delayed. None of this bode well for households that have still not recovered, in real terms, from the lockdown blow,” it concluded.
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