QuantEco Research’s latest TRUCE Index shows that consumption further lost pace at the end of CY23, marking the second consecutive month of deceleration

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Feb 21, 2024

QuantEco Research || Dec-23 TRUCE Index - Decelerates a tad more

While Urban TRUCE index slipped marginally to a 4-month low of 0.60 in Dec-23 to 0.63 in Nov-23 (revised lower from 0.64), owing to sequential moderation in sales of passenger vehicles, fuel consumption and personal loans in Dec-23, Rural consumption index too eased to a 4-month low of 0.58 in Dec-23 from 0.63 in Nov-23, led by lower tractor and two-wheeler sales incrementally.

Rural consumption is likely to remain supported by fiscal spending ahead of general elections in early FY25, and cushion the probable downside from Rabi output The possibility of El Nino completely fading away by Apr/May-24 however augurs well for 2024 Southwest monsoon prospects, as well as agriculture output, incomes and consumption in turn. Strength in urban consumption remains on watch heading into FY25, as lagged impact of higher interest rates and RBI’s measures on unsecured retail lending are expected to play out. Services consumption could continue to undergo post pandemic normalisation.