The consumer confidence index (CCI) based on the current perception of the economic situation, employment, price level and income weakened further in November 2019 vis-a-vis the year ago period, according to the Reserve Bank of India’s November 2019 round of consumer confidence survey (CCS).

The CCI reading, which also includes spending besides the above-mentioned variables, in the latest round of CCS was at 85.7 vis-a-vis 89.4 per cent in September 2019 and 93.9 in November 2018.

This reading should be considered in the backdrop of the RBI slashing the GDP forecast for FY2020 to 5 per cent from the 6.1 per cent forecast made earlier and the retail inflation projection for the second half of FY2020 being revised upwards to 4.7-5.1 per cent against 3.5-3.7 per cent earlier.

Barring spending, which is reflecting ‘positive sentiments with sign of deterioration compared to last round’, the remaining four main variables comprising the CCI are pointing to ‘negative sentiments with sign of deterioration compared to last round’.

Future expectations index

The CCI based on the ‘one year ahead expectations compared with the current situation’ too has weakened in the latest CCS to 114.5 from 118 in the preceding round and 120 in the November 2018 round.

In the case of economic situation and employment, the ‘one year ahead expectations compared with the current situation’ is reflecting ‘positive sentiments with sign of deterioration compared to last round’.

The income and spending parameters are showing ‘positive sentiments with sign of improvement compared to last round’.

The price level is reflecting ‘negative sentiments with sign of deterioration compared to last round’.

As per the CCS, which was conducted in 13 major cities, most respondents perceived prices as having increased during the last one year, and they expect further rise in prices in the year ahead.

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