The Ipsos Inflation Monitor 2022 shows, global citizens and urban Indians are in a not so alarming state in terms of their financial conditions currently. Majority are either comfortable or scraping through.
Indians for instance, are mostly coping fine: 25% say they are living comfortably, 29% say they are doing alright, 24% are just about getting by, but on the contrary 13% are finding it quite difficult and 8% are finding it very difficult to cope with their financial conditions.
Global citizens display a somewhat similar pattern: 12% are living comfortably, 28% are doing alright and 30% just about getting by ; on the flip side 19% were finding it quite difficult and 10% were finding it very difficult.
Of course there were some markets which claimed to be going through tough financial conditions: Turkey for instance had at least 31% saying they were finding it quite difficult and 33% finding it very difficult. Argentina had 44% claiming they were finding it quite difficult and 24% finding it very difficult.
How does the future look? For the rest of 2022?
Urban Indians predict cost of living to go up in the remainder of the year:
Inflation - 35% believe inflation will rise a lot, 33% say it will rise a little, 15% say it will stay the same and 14% say it will fall a lot.
No. of unemployed in India – 28% said it will rise a lot, 31% believe it will rise a little, 19% say it will stay the same and 18% believe it will fall a lot/ little.
Own standard of living – while 7% beleive it will fall a lot and 11% believing it will fall a little, 29% say it will stay the same and about 50% are optimistic their standard will rise a lot or little.
Taxes paid – 23% say rise a lot, 35% say rise a little, 26% say will stay the same and 11% said it will fall a lot/ little.
Interest rates – 22% expect it to rise a lot, 35% feel will rise a little, 22% say stay the same and 16% feel will fall a little or a lot.
Your disposable income: a miniscule section of 9% believes their disposable income will fall a lot and 11% say fall a little, but majority are optimistic. While 48% believe their disposable income will rise a lot and 27% feel it will stay the same.
Personal financial concerns in the next 6 months
Personal financial concerns are real and urban Indians are concerned about the future, in the next 6 months. 79% are concerned about the cost of goods and services increasing; 73% are concerned about the ability to pay their gas & electricity bills ; 69% are concerned about the ability to pay bills; 68% are concerned about their ability to buy things they are used to buying; 67% are concerned about the value of their home etc.
Commenting on the findings of the Global Inflation Monitor, Amit Adarkar, CEO, Ipsos India said, "Cost of living is increasing due to the prolonged pandemic, global economic slowdown and the continuing War in Ukraine even in India, though the urban consumer is better placed financially, to deal with it. In smaller towns, the impact would be felt a lot more. But if we look at the future outlook, fear around rising household expenditure, utilities, ability to pay bills in the future is increasing and real. Also citizens polled expect inflation, interest rates, taxes to increase. Even unemployment could further increase, is the fear of more urban Indians, for the next 6 months."
Expectations for Spending
Urban Indians expect tangible impact on their household spends in the next 6 months. 74% expect their cost of food shopping to increase, 72% expect their cost of Utilities such as gas and electricity to increase, 72% expect their motoring fuel cost (of petrol, diesel or gasoline) to increase, 70% expect cost of other household shopping to increase, among others.
Potential Consumer Actions
Hypothetically, we asked consumers if price rises meant that they could no longer afford their normal lifestyle, what actions would they take?
40% of Urban Indians said they would spend less on socializing; 38% would delay large purchase decisions (for example on furniture and cars); 38% would spend less on holidays; 32% would spend less money on other household shopping; 32% would use savings; 31% would use a car or motor less often, to spend less on fuel costs.
“Urban consumers believe they will need to cutback on discretionary spends to survive in the tougher macro environment, if it worsens in the next 6 months. By curtailing spends on socializing, holiday trips, using less of personal vehicles (to save on fuel costs) and even postpone purchases of big ticket items. Desperate times would call for desperate measures, incase it would unfold,” stated Adarkar.
Factors driving rising prices?
Urban Indians hold the following factors responsible for rising prices – policies of my national govt. (72%), interest rate level in my country (72), the state of the global economy (71%), the Russian invasion of Ukraine and its consequences (71%), the COVID19 pandemic (70%), businesses making excessive profits (68%) and immigration into my country (62%).