New Delhi: The confidence of consumers in the Indian economy dropped to historic lows in July 2020, according to a recent Reserve Bank of India (RBI) survey, in what is the latest sign that reversal of lockdown measures may not automatically jump-start sentiment.
The ‘current situation index’ (CSI) – a measure of how consumers currently feel about the general economic situation – dropped to an all-time low of 53.8 in the latest survey round (July 2020) from the 63.7 recorded in May 2020.
Credit: RBI
According to the central bank, due to the COVID-19 pandemic, the survey was conducted through telephonic interviews during July 1-12, 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 5,342 households across these cities.
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“Consumer perception of the prevailing economic situation, employment scenario and own income was significantly lower than that in May 2020… Most respondents reported reduction in discretionary spending though their overall spending increased during the last one year; they do not expect to increase non-essential spending in the coming year as well,” the survey noted.
Credit: RBI
A separate ‘future expectations index” (FEI) – which gauges how consumers feel the situation might change in the year ahead – however, charted back into the positive territory indicating signs of recovery for the year ahead.
“Respondents were, however, somewhat optimistic about these parameters for the coming year vis-a-vis the previous survey round,” the survey noted.