Consumer confidence remained very low in November 2020 compared to a year ago, as reflected in the Current Situation Index (CSI), as per Reserve Bank of India’s (RBI) Consumer Confidence Survey.
The weak confidence is attributable to consumer sentiments on the general economic situation, employment scenario, price levels and household incomes, according to the central bank.
The November 2020 CSI reading came in at 52.3 against 85.7 in November 2019.
The latest CSI reading, however, showed a marginal improvement over the all-time low of 49.9 recorded in the previous (September 2020) round.
Households remain optimistic of the situation one year ahead, with the Future Expectations Index (FEI) remaining in growth terrain at 115.9, against 114.5 in the November 2019 round.
The latest FEI reading is flat vis-a-vis the previous (September 2020) round.
Respondents reported higher essential and overall spending, though discretionary expenditure contracted; non-essential spending is expected to contract further in the coming year
Grim economic scenario
On the current perception of the general economic situation, 77.5 per cent of the respondents said it had worsened in the current round of survey versus 51.6 per cent in the year-ago round.
More than half (50.9 per cent) of the respondents expect the general economic situation to improve one year ahead, against 48.9 per cent in the year-ago round.
On the current perception regarding employment, 79.5 per cent of the respondents said it had worsened in the current round of survey versus 57.5 per cent in the year-ago round.
More than half (52 per cent) of the respondents expect the employment scenario to improve one year ahead, against 46.3 per cent in the year-ago round.
Majority of the respondents (89.7 per cent) said their current perception regarding price level had increased in the current round of survey versus 86.8 per cent in the year-ago round.
One year ahead, 70.5 per cent of the respondents expect the price level to increase, against 78 per cent in the previous round.
When it comes to the current perception regarding income, 63.1 per cent of the respondents said it had decreased in the current round of survey versus 26.7 per cent in the year-ago round.
One year ahead, 51 per cent of the respondents expect their income to increase, against 52.8 per cent in the previous round.
On the current perception regarding spending, 55.6 per cent said it had increased in the current round of survey versus 73.2 per cent in the year-ago round.
One year ahead, 69.1 per cent of the respondents expect their spending to increase, against 77.4 per cent in the previous round.
In view of the Covid-19 pandemic, the Consumer Confidence survey was conducted through field interviews, wherever possible, and telephonic interviews elsewhere, during October 30 – November 12, 2020 in 13 major cities.
Perceptions and expectations on general economic situation, employment scenario, overall price situation and own income and spending were obtained from 5,319 households across these cities.