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Thursday, November 1, 2012

Increasing Consumer Confidence Index (CCI) is a good sign for global economy.

Consumer Confidence Index (CCI) is a key lead indicator of economic activity in the country. It reflects the degree of optimism or pessimism that consumers have for the economy. Increased spending reflects optimism and vice versa. The good news is that the global consumer confidence index rose by one point to 92 in the third quarter. The improvement in the third quarter was driven by positive signs in US. However, a reading of below 100 signifies that overall the consumers are still pessimistic.

The story is different in the emerging markets. Consumer confidence is gaining momentum there. In fact, it is strongest in India and Indonesia. Recent policy actions in India have given the necessary boost to it. However, for the global index to rise above 100, environment in the Euro Zone economies must improve. Apart from policy moves, resolving the unemployment issues can help do the same.

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