Consumer Perception of Economic Situation at an All-Time Low: RBI Report

The current situation index (CSI) of the Consumer Confidence Survey (CCS) conducted by RBI, recorded its third successive all-time low in September 2020. The survey gathered information regarding the perception and expectations of 5364 households on the general economic situation, employment scenario, price situation, and their own income and spending details.

The survey calculates two Consumer Confidence Indices; Current Situation Index (CSI) and Future Expectations Index (FEI). While CSI assesses current perceptions of consumers as against a year ago, FEI calculates expectations for the year ahead as compared to now. While CSI has been on a steady decline from 53.8 in July to 49.9 in September, FEI has been optimistically rising with 115.9 in September as against 105.4 in July.

An overarching 79.6per cent of respondents are of the opinion that the general economic situation has worsened as compared to a year ago wherein only 47.9 per cent were convinced of the same. However, half the survey sample is hopeful of improvement in the year ahead.

While 82.9per cent of the surveyed are convinced of an increase in the level of prices, this is still low compared to January 2020 when 90.6 per cent perceived the same. 69.5per cent expects this to rise further in the coming year. The survey also records rapid fall in income with 62.7 per cent agreeing to fall in income as opposed to 26.7per cent a year ago, noting a 36per cent increase in the population whose incomes have fallen in a year.

The survey also noted a significant reduction in both overall and essential spending from May 2020. 81.7per cent of those surveyed perceive the employment situation to have worsened against 67.4 per cent in May 2020 and 52.5per cent a year ago.

The surveyed population show remarkable optimism and hopes for the year ahead. A large section of the surveyed population expects betterment in the overall economic situation, employment, income and spending levels for the coming year.

The survey information was gathered via telephone between August 29- September 2020 from across 13 major cities including Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna, and Thiruvananthapuram.