Consumer confidence plunged to a three-year low in India as households became more pessimistic about the economic outlook and their personal finances, a survey showed Thursday.
The MNI India Consumer Sentiment Indicator fell to 113.7 in November, the third consecutive month of declines. It is also the lowest level of consumer confidence since November 2012. The survey has been running since 2012.
"The driving force behind the November fall in sentiment was a sharp drop in expectations for business conditions in one year," the authors wrote.
Respondents are not "convinced that either rate cuts or steps taken by the government to promote growth will have a significant impact ," even though India's GDP rose by 7.4 percent in the third quarter and outpaced China's growth in the three months though September.
The Reserve Bank of India had already slashed its repo rate four times this year, but held the rate steady at 6.75 percent in December. The repo rate is the country's key interest rate at which the central bank lends money to commercial banks.
Loose monetary policy is meant to spur "a revival in private investment demand, supported by easing input prices and improving conditions for doing business," according to the December RBI statement.
Another issue that respondents raise in the survey was rising consumer prices; 93 percent of respondents said they used most of their income on daily expenses, with little left to save or invest. Respondents were also the most dissatisfied with the current level of prices since August 2014.
Data for the survey was collected via telephone interviews and with over 1,000 respondents.
Asia's third largest economy reported annual consumer price inflation reached 5 percent in October, with retail food inflation at 5.25 percent, compared to 3.88 percent in September.
The MNI Business survey revealed business confidence is also at its lowest in November since February 2014.