Consumer confidence drops to six-year low: RBI survey

Mumbai: Consumer confidence dipped to six-year low in September as sentiment around employment, income and discretionary spending declined, according to Reserve Bank of India (RBI)'s monetary policy released on Friday.

Consumer confidence weakened in September, with both the current situation index and the future expectations index recording declines, said the RBI in its consumer sentiment survey report.

The Current Situation Index (CCI) fell into 89.4 in September from 95.7 recorded in the July round of survey, the data showed. In September 2013, it had touched 88.

The survey also revealed that sentiment for the overall economy and employment also declined and people were less optimistic about their income over the year ahead.

For instance, perception and expectation of employment have continued to decline, touching -24.5 in September from -13.1 seen in the July round of survey. However, sentiment around income have turned negative for the first time since March 2018.

While sentiment for overall spending, primarily on essentials remains strong, sentiment for discretionary spending weakened in the September round of the survey, it said.

The central bank conducted the survey across 5192 households in 13 major cities including Ahmedabad, Bengaluru, Bhopal, Bhopal, Delhi, Mumbai among others. These households were asked about general perceptions and expectations on the economic situation, employment scenario, price situation, personal income and spending.

India’s economy grew at its slowest pace in over six years in April-June, expanding 5%, largely because of a slowdown in consumption demand.

On Friday, RBI cut interest rates for the fifth time in a row in an attempt to give a renewed push to a slowing economy, and said it will maintain an accommodative policy stance until growth revives.

RBI lowered its repo rate—the rate at which banks borrow from it—by 25 basis points to 5.15%. With this cut, the policy rates have come off by as much as 135 basis points so far this year to a nine-year low.