The Consumer Confidence Index (CCI) is a survey that indicates how optimistic or pessimistic consumers are regarding their expected financial situation. If the consumers are optimistic, spending will be more, whereas if they are not so confident, then their poor consumption pattern may lead to recession.
CCI is key to economic growth as consumption increases when they feel confident about the present economic situation and their own financial conditions. In a country like India, consumption affects 60-70% of GDP, the reason why CCI has an important role to play in the economy, showing insight into growth prospects.
In India, ZyFin Consumer Outlook Index (COI), developed by Dr. Sam Thomas, Ph.D. and Debopam Chaudhuri, Chief Economist at ZyFin, is the monthly index of consumer sentiment. It is designed to provide robust insight into the Indian economy. The survey takes place once a month in 11 cities questioning 3000 consumers.
The survey consists of questions regarding consumer's sentiments over various factors in the current situation and future. Here are a few indexes that help aggregate overall confidence.
Spending index: The consumer is asked about the willingness to spend on major consumer durables, purchasing vehicles, or real estate. This measures the overall spending scenario on necessities as well as luxuries for the next quarter.
Employment index: The consumer is asked about current and future ideas on employment situations, joblessness, job security, which reflects the sentiments of the current or expected employment in the country.
Inflation index: The consumer is asked about interest rates and levels of prices of all goods, tracking the price expected by consumers and their spending on basic necessities.