Consumer confidence index hit the lowest so far due to the hammered economy caused by the coronavirus pandemic. In May, the consumer confidence index was 63.7 and it dropped to 53.8 in July according to RBI’s survey released on Thursday.
As per RBI, the survey was conducted via telephonic interviews during July 1-12, 2020. The survey was conducted in thirteen major cities.
Perceptions and expectations on the general economic situation, employment scenario, overall price situation and own income and spending have been obtained from 5,342 households across these cities.
Consumers were pessimistic about the prevailing economic situation, employment scenario and own income were significantly lower than that in May 2020.
Major respondents said that their optional spending reduced this year however, their overall spending increased from the last year. The RBI report said that respondents do not expect an increase in their non-essential spending in the coming year as well.
Consumer Confidence Falls To A Record Low
However, the future expectations index comes out positive reflecting that the coming year will show recovery.
The inflation expectation of households increased by 60 basis points in July as compared with May. The current median inflation perception rose to 9.9%, according to the RBI survey.
The three months ahead median inflation expectation stood higher than the one-year horizon for the second consecutive survey.
Inflation expectations for both three months and one-year horizons increased by 10 basis points each, over the previous round; three months ahead median inflation expectation stood higher than that for one-year horizon for the second consecutive survey round
From the previous quarter having 102.2, the Business Assessment Index fell the lowest to 55.3 in the first quarter.
The manufacturing companies also evaluated the stumbling major demand indicators like books ordering, production, and employment conditions. For the second quarter, the business expectations index reduced to 99.5.