An impactful inflation is reported for household commodities.

According to a regional consumer survey by Jefferies, Indian citizens are facing high purchasing prices on essential commodities which also includes fuel and energy. Most consumers in India feel confident about their job outlook and ability to absorb the next price hike. 

In an Asia survey of 2,600 consumers in Australia, China, Hong Kong, India, and Japan, consumers were also more positive about the outlook for the economy, common in the coming year, said Jefferies analysts. The survey was propounded to analyze the impact of increasing prices and interest rates on consumers.

Consumer confidence is highly polarized across the region with China and India showing the most optimism across the region. 80% of respondents in India and 73% in China feel more confident concerning their finances. Concerns over macro conditions weigh most heavily in Hong Kong with 57% of respondents feeling less confident. Consumers in Australia and Japan are slightly less confident,” they said.

Jefferies analysts who track consumer goods companies in India say while inflation stays as an issue, that appears to be offset by strong wage growth – 82% of those employed asked (in India) expect their wage growth to keep pace with inflation over the next 12 months. India’s findings favor urban consumers.

There are some mass consumer groups for which inflation has a greater impact, especially low-income consumers. In India, the recorded inflation hike in groceries and household products is 58%, while in fuel and energy is 45%.

The families of Indian households in low-income sections are facing a great increase in Inflation. Therefore, they are switching to cheaper consumer products. “The survey also points to high intent among consumers to downgrade to cheaper options, with 73% of respondents doing so in groceries and household products,” according to the report’s India-specific insights.

The survey also found that consumers are delaying their optional purchases like vacations and electronics. “This is also corroborated by Fast-moving consumer goods FMCG management commentary, which also highlights consumers titrating volumes and downgrading to lower-priced options. The survey also points to a high intent to purchase private labels. Inflation also appears to be causing consumers to cancel or postpone purchases, especially in discretionary categories such as travel/ holidays, home renovation, electronics, and restaurants/ takeaways,” they said.