Continued Low Consumer Confidence Telegraphs Significant Concern
regarding Current and Future State of Indian Economy
Overall Consumer Sentiment Remains Unchanged in October Due to Economic, Employment,
and Consumer Spending Factors; However, Improved Inflation Sentiment Reflects Recent
Moderation in Commodity and Crude Prices
MUMBAI, November 10, 2008—Customized knowledge services company Boston Analytics today
released the Boston Analytics Consumer Sentiment Index (BACSI) for the month of October 2008. The
BACSI – a monthly barometer of Indian consumer opinion regarding the current state and future
expectations of the macro economy, household financial conditions and consumption – stood at 84 for
October, unchanged from the previous month’s reading.
The index is based on a monthly survey targeting a diverse set of Indian consumers. In an effort to
capture the country’s heterogeneity, the BACSI’s October survey has been extended in terms of both
geographic coverage and sample size with the inclusion of additional cities. The survey is now conducted
across eleven cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Nagpur, Kochi, Lucknow,
Chandigarh, and Jaipur. It addresses macro-level variables reflecting the nation’s economic conditions,
including indicators such as employment, inflation, interest rates and real estate. The BACSI also studies
micro-level variables such as household income, commitment towards expenditure on basic necessities,
savings, and other elements.
The BACSI for the month of October stood at 84.0, unchanged from the previous month’s reading.
Disaggregation of the data reveals weakness in respondents’ confidence in the general economy and in
employment conditions. Sentiment related to consumer spending fell for the fourth consecutive month
indicating cautious spending in reaction to global financial turmoil. Sentiment related to inflation improved
in October due to moderation in commodity and crude prices in the past few weeks.
"The urban consumer in India continues to telegraph significant concern about the future of the Indian
economy,” said Sam Thomas, Ph.D., Boston Analytics’ director of research and development. “The
primary drivers of the declining sentiment were fears of continued weakness in the state of the general
economy and a marked declining trend in consumer spending plans."
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