Consumer confidence sank in January to its weakest level since October 2005 as gloom over current economic conditions increased. The Consumer Confidence Index (CCI) fell 5.9% to 78.4 from 83.3 in December. It appears that the recent rise in basic foodstuffs prices hit consumers’ feelings about the current environment. Besides, job scarcity and kerosene fuel shortages are also all to blame for a 9.1% plunge in the Present Situations Index (PSI), its lowest level in seven months.
At the same time, the Expectations Index (EI) also weakened in January, down 4.3% to 92.1. As has been the case for the past several months, the main drivers of consumers’ increasingly pessimistic outlook is the continued expectations on rising prices, particularly basic foodstuffs prices, declining income prospects and worsening job outlook.
The latest survey shows that consumer confidence declined for rural households much more than for urban respondents. Note that consumers in rural areas have seen their incomes dry up as they wait for the next harvesting season. For rural respondents, the CCI slumped by 9.5% to 77.4, while for urban respondents, the CCI only fell by 4.4% to 78.8 in January. Read the rest of this entry »