As per QuantEco Research’s TRUCE Index, consumption recovery lost pace in Nov-23 owing to the end of festive season with Diwali on 14th Nov-23

Download Report
Jan 29, 2024

QuantEco Research || Nov-23 TRUCE Index - Down but not out

Both rural and consumption indices decelerated in Nov-23. Urban consumption index slipped marginally from 0.67 in Oct-23 to 0.64 in Nov-23, as sales of passenger vehicles moderated. Rural consumption index eased sharply to a 3-month low of 0.63 from a downwardly revised 0.69 in Oct-23 (vs. 0.71 earlier), led by lower tractor and two-wheeler sales. Notwithstanding the downside in Nov-23, consumption indices remained almost at par/marginally higher versus Sep-23 levels for rural and urban metric respectively. This underscores a third consecutive month of relatively resilient consumption outcome in the economy.

Rural consumption is likely to remain supported by fiscal spending that could galvanize further ahead of general elections in early FY25, and cushion the probable downside from Rabi output (amidst lower sowing as well as warmer temperatures owing to El Nino). Strength in urban consumption beyond Nov-23 remains on watch, as lagged impact of higher interest rates and RBI’s measures on restraining unsecured retail lending play out.