Consumer confidence hits 4-year high in Sep

New Delhi: Consumer confidence touched a four-year high in September, continuing on its recovery path after a brief pause in July, the Reserve Bank of India (RBI) said.

“The current situation index (CSI) reached a four-year high on the back of respondents’ better assessment of current general economic situation and employment conditions in September 2023. Households remain highly optimistic on future earnings even though their sentiment on current earnings remained around its July 2023 level,” RBI said in its bi-monthly consumer confidence survey (CCS) released Friday. During the month, CSI touched 92.2.

The bi-monthly survey tracks consumers’ current perception on general economic situation, employment scenario, overall price situation and own income and spending. It also tracks one-year-ahead expectations of households on the same parameters.

The RBI survey was conducted from 2 to 11 September covering 6,077 respondents across 19 major cities. Female respondents accounted for 50.3% of this sample.

Findings of the survey coincide with the onset of the festive season when households typically spend more. However, consumer perception around current spending dipped marginally in September compared to July. Most other variables such as economic situation, employment and price levels improved from the last round, but remained negative.

The future expectations index (FEI) also reached a four-year high in the latest survey round, it said.

The survey comes as energy and food prices remain elevated globally. In fact, RBI said respondents were less pessimistic on prevailing price levels and inflation, when compared to a year ago. Though price expectations for the year ahead remain negative, respondents’ pessimism on this front has moderated in the latest survey round.

On Friday, the Monetary Policy Committee (MPC) of the RBI unanimously decided to keep the repo rate unchanged at 6.5 per cent on Friday. “The Indian economy is forging ahead in a challenging global environment, drawing strength from its underlying macroeconomic fundamentals and buffers,” RBI governor Shaktikanta Das said. However, the central bank emphasized that there is no room for complacency. “Volatile energy and food prices in the wake of lingering geopolitical tensions and adverse weather conditions render uncertainty to the inflation outlook. We remain vigilant of the evolving inflation dynamics,” Das said.