MasterCard Intelligence recently released the ‘MasterCard Index of Consumer Confidence (H1 2017)’. The report got lot of coverage primarily because the latest data shows that India dropped the largest in the Index (9.3 points). Now RBI also regularly releases (every month) similar consumer confidence survey results.
Does they correlate or MasterCard is a little pessimistic in its approach?
A few comparison on the 2 surveys:
- MasterCard survey had 9153 respondents across APAC in H1 2017 survey, while RBI survey covers 5259 respondents across India (from Metro cities)
- MasterCard survey is a 2month long (April-Jun 2017 for the latest one), while RBI does it once every quarter i.e. 4 in a year generally
- There is significant similarity on the key factors that are compared. Economy, Employment, Income overlaps between the two. Stock Market & Quality of Life are the remaining 2 for MasterCard Index, RBI has Spending & Price Level. But both has 5 factors on which the indexes are calculated. Spending can be taken as a surrogate for Quality of Life (though health & other factors will also exist)
Now let us compare the outcomes of the 2 surveys.
- MasterCard Index saw a drop by 9.3 points from 95.3 to 86 while RBI Current Situation Index (CSI) saw a drop of 5.2 points from 102 to 96.8 for the same time. From RBI perspective, less than 100 means, CSI fell in pessimistic zone. So both the surveys shows sharp decline in consumer confidence. The key difference is that while MasterCard consumer confidence index for India still lies in ‘very optimistic’ territory, RBI survey puts it under pessimistic zone
- Drilling down, Economy or Economic Situation saw large drop in both the surveys. MasterCard survey indicates 11 point drop while RBI survey indicates a sharp decline from positive 15.4 in H2 FY 16 to a negative 7.5 in H1 FY17
- A slight contradictory story comes out from the ‘Spending’ metric of RBI. RBI survey shows a positive improvement from 67.9 to 79.8, the quality of life parameter in MasterCard survey shows a large drop of 11.6. While ‘quality of life’ may have many other parameters but higher spending at a time low quality of life sounds a little counterintuitive
Overall the MasterCard survey largely reinforces the finding of RBI survey. Despite the difference in respondents volume & difference in measurement/ calculation technique, the overall message conveyed by both seems to be same- ‘significant dent in Indian consumer confidence primarily led by significant drop in the confidence on the overall economic situation of the country’
RBI Consumer confidence survey for related months
Following MasterCard consumer survey accessed from http://www.masterintelligence.com:
- ‘Bullish Outlook on Stock Market Lifts Consumer Confidence in Asia Pacific: Mastercard Index‘ (Aug16, 2017)
- INDIA’S CONSUMERS ARE MOST OPTIMISTIC IN ASIA PACIFIC: MASTERCARD
INDEX OF CONSUMER CONFIDENCE (Jan 16 2017)