Consumer confidence plummets in March on concerns of India-Pakistan conflict post-Balakot air strike: Study

The concerns of an imminent conflict with Pakistan after the airstrike on Balakot terror camps in the wake of the Pulwama terrorist attack last month further pulled down the already sliding consumer confidence in March, according to a survey report. The India Primary Consumer Sentiment Index (consumer confidence) nosedived by 6.8 percentage points in March, found a joint survey by Reuters and Ipsos. [caption id=“attachment_4298855” align=“alignleft” width=“380”] Representational image. AFP[/caption] The monthly Primary Consumer Sentiment Index (PCSI) result, which is driven by the aggregation of the four, weighted, sub-indices, has seen a sharp fall across all of them: the PCSI Employment Confidence (“Jobs”) Sub-Index, is down by a glaring 7 points; the PCSI Economic Expectations (“Expectations”) Sub Index, which has sharply fallen by 10.9 points; the PCSI Investment Climate (“Investment”) Sub-Index which has dropped by 6.1 points; and the PCSI Current Personal Financial Conditions (“Current Conditions”) Sub-Index which is down by a significant 4.9 percentage points over last month. “The survey was fielded in the last week of February and the first week of March, amidst tensions along the India-Pakistan border. The near-war conflict sharply pulled down the already sliding consumer confidence. It once again proves that consumer and economy do not want war - rather afraid of it," says Parijat Chakraborty, country service lines group leader, public affairs, corporate reputation and customer experience, Ipsos India. [caption id=“attachment_6287191” align=“alignnone” width=“824”] India PCSI 2013-2019 trend.[/caption] Chakraborty further said this factor strongly clouded the fear around rise in inflation and lack of jobs. “Since our respondents are largely urban and for the salaried ones, it is also the time for tax saving investment, leading to temporary cash crunch. All these factors have a cascading effect, adding to pessimism,” he said. These are findings of the Ipsos online poll that was conducted from 22 February, 2019 to 8 March, 2019. For this survey, 500 adults from Ipsos’ India online panel aged between 16 and 64 were interviewed online. As this is an online poll in India, representative of the online community in the country, it is not reflective of the general population. However, the online sample is valuable as they are more urban, educated and have higher income than their fellow citizens and often referred to as “upper deck consumer citizens” or primary consumers. The Reuters-Ipsos India PCSI, ongoing since 2010, is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments.