Consumers’ perception on the general economic situation and the employment scenario has softened, according to the Reserve Bank of India’s Consumer Confidence Survey (CCS).

The survey findings come in the backdrop of the RBI cutting its FY20 GDP growth projection to 6.9 per cent in the August bi-monthly monetary policy review from 7 per cent in the June policy.

Consumer confidence, as reflected in the current situation index (CSI), declined to 95.7 in the July 2019 against 97.3 in May.

CSI comprises five variables — economic situation, employment, price level, income and spending. CCS was conducted conducted in 13 major cities and obtained 5,351 responses on households’ perceptions and expectations on the five variables.

As per the Survey, consumers’ perceptions on the general economic situation and the employment scenario softened while the assessment of their own incomes turned out to be less optimistic than in May.

Respondents perceived a rise in the price level and the majority expect prices to rise over the year ahead. This boosted sentiments on overall spending, but they were less optimistic about discretionary spending, the survey said.

FEI declines

The future expectations index (FEI) declined to 124.8 in the July 2019 Survey vis-a-vis 128.4 in the May 2019 Survey.

As per the Inflation Expectations Survey of Households, the three months ahead median inflation expectations of households remained unchanged at 7.6 per cent — the same as in the May 2019 round of the survey; one year ahead median inflation expectations moderated by 20 basis points from 8.10 per cent to 7.9 per cent.

As per the Survey of Professional Forecasters on Macroeconomic Indicators, forecasters have assigned the maximum probability to real GDP growth being in the range of 6.5-6.9 per cent in 2019-20 and 7-7.4 per cent in 2020-21.

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