Indian consumers are cautious about economic outlook, says a study

Mumbai, Jan 11: The Indian economy may be emerging, but there is a note of caution on the economic outlook among the consumers, says a study.

The seventh half-yearly MasterIndex Consumer Confidence Survey, which was commissioned by MasterCard Worldwide in selected markets in South Asia, Middle-East and Africa (SAMEA), has revealed that the overall sentiment about the country's economic outlook has lowered compared to the first half of 2006.

The findings of the survey were unveiled before the media by Suman Bery, Director General, National Council for Applied Economic Research (NCAER) in presence of the Country Manager (South Asia) of MasterCard Worldwide, Nitin Gupta here today.

According to the survey results, a MasterIndex score of 65.1 shows Indian consumers are cautiously optimistic about the next six months, however, this score is 11.3 points lower than the last survey conducted six months ago.

The overall score is supported by a fairly positive outlook on the stock market (77.0) and regular income (70.6), mildly optimistic sentiments on the economy (61.9), with less optimism on both the quality of life (59.8) and employment (56.3) scores.

Commenting on the findings, Mr Bery said ''Some supply constraints are beginning to express themselves, notably in infrastructure and skilled labour''.

''In reaction to monetary tightening in the industrial countries, the Reserve Bank has continued to tighten monetary policy. For all these reasons many international forecasts predict a slight softening, although continued robust Indian growth in 2007,'' Mr Bery said.

Past consumer sentiments in the country have been corroborated by post survey economic developments. The drop in this MasterIndex score is an indication that consumers are becoming more realistic about the challenges the Indian economy faces in maintaining the current growth rate, he added.

Later talking to UNI on the sidelines of the media briefing, he said ''The drop in the MasterIndex from first half of the year to the second half on the five parameters means that the Indian consumers have come out of the state of euphoria and have become cautious now.''

UNI