Consumer confidence falls to a record low: RBI Survey1 min read . Updated: 06 Aug 2020, 11:56 PM IST
The current situation index dropped to 53.8 in July from 63.7 in May, according to RBI’s forward looking survey released on Thursday
India’s consumer confidence hit an all-time low owing to bleak economic scenario amid the disruption caused by the coronavirus pandemic.
The current situation index dropped to 53.8 in July from 63.7 in May, according to RBI’s forward looking survey released on Thursday.
According to the RBI, the survey was conducted through telephonic interviews during July 1-12, 2020 in thirteen major cities.
Perceptions and expectations on general economic situation, employment scenario, overall price situation and own income and spending have been obtained from 5,342 households across these cities.
Consumers were pessimistic about the prevailing economic situation, employment scenario and own income was significantly lower than that in May 2020.
Most respondents reported reduction in discretionary spending though their overall spending increased during the last one year. They do not expect to increase non-essential spending in the coming year as well,it said.
However the respondents remained optimistic about the coming year vis-a-vis the previous survey round.
The future expectations index for the year however, rebounded into the positive territory indicating signs of recovery for the year ahead.
The inflation expectation of households increased by 60 basis points in July as compared with May. The current median inflation perception rose to 9.9%, according to the RBI survey. The three month ahead median inflation expectation stood higher than the one year horizon for the second consecutive survey.
Inflation expectations for both three months and one year horizons increased by 10 basis points each, over the previous round; three months ahead median inflation expectation stood higher than that for one year horizon for the second consecutive survey round
The Business Assessment Index fell sharply to all-time low of 55.3 in the first quarter from 102.2 in the previous quarter.
The manufacturing companies assessed faltering of major demand indicators like production, order books and employment conditions.
The business expectations index contracted to 99.5 for the second quarter.