Indian consumer sentiment surges amid festive optimism and economic rebound

India's urban consumer sentiment saw a notable resurgence in October, with the LSEG-Ipsos Primary Consumer Sentiment Index (PCSI) for India climbing by 4.3 percentage points. This bounce, fuelled by festive cheer and steady monsoon patterns, has lifted India to the highest National Index Score globally among 29 markets, as per the latest report from LSEG-Ipsos.

Last month, India’s PCSI registered a modest 0.4 percentage point rise after a slight 2.9-point dip in August. However, October’s uptick shows a substantial increase across all four key sub-indices, suggesting a broad-based uplift in consumer confidence.

The PCSI Current Personal Financial Conditions Index surged by 7.7 percentage points, the Economic Expectations Index increased by 3.3 points, and the Investment Climate Index rose by 7.1 points. Even the Employment Confidence Index noted a modest 0.3-point increase, reflecting tempered optimism in the job market.

Explaining the October findings, Amit Adarkar, CEO of Ipsos India, highlighted the renewed confidence in personal finances and investments among Indian consumers. “Sentiment has improved significantly for personal household expenditure and big-ticket investments, particularly during the festival season when attractive promotional offers and flexible financing options are available,” Adarkar said.

He attributed the upswing in economic confidence to strong domestic consumption, infrastructure expansion, and favourable monsoons. Even the International Monetary Fund (IMF) forecasts India’s GDP growth at a robust 7% for 2024.

However, despite the positive trend in personal and economic outlook, Adarkar noted a degree of caution in employment sentiment. “While jobs confidence is up, hiring remains slow, as companies are focused on closing a strong H2 after facing headwinds in the first half of the year due to elections, severe weather, and related economic impacts,” he added. India’s automotive sector, a bellwether for economic health, recorded a mere 0.5% growth from April to September, signalling a cautious return to form in specific sectors.

India leads global consumer sentiment index

With a National Index score of 66.3, India now leads the global sentiment rankings, followed by Indonesia at 62.1, the only two countries above the 60-point mark. A number of other economies scored positively, with Singapore (58.3), Malaysia (58.2), Thailand (56.8), the U.S. (55.6), and Sweden (55.4) all crossing the 50-point threshold. Meanwhile, Japan (39.3), Hungary (35.3), and Turkey (33.0) fell below the 40-point mark, reflecting ongoing challenges in consumer sentiment.

India’s resurgence is part of a wider positive shift globally, with consumer sentiment up year-over-year in 13 countries. Malaysia led the charge with a striking 12.1-point increase from October 2023.

This October surge signals a confident consumer base in India ready to spend during the festival season, an encouraging sign for retailers and the economy at large. While challenges in specific sectors and cautious job sentiment remain, India’s economic fundamentals appear solid, supported by resilient domestic demand and government-led growth initiatives.

For global brands and investors, India’s high consumer confidence score underscores its position as a key market to watch in the coming year.