Consumer confidence falls to an all-time low, shows RBI survey

Consumer confidence has fallen to an all-time low as consumer perceptions on the general economic and employment situations have lowered further, the Reserve Bank of India’s (RBI’s) May round of survey showed.

Consumer confidence for the current period weakened further; the current situation index (CSI), which has been in negative territory since July 2019, fell to a new all-time low as consumer perceptions on general economic situation and employment scenario lowered further,” the RBI said.

The future expectations index (FEI) also moved to “pessimistic territory for the second time since the onset of the pandemic”, driven by a sharp fall in expectations on the general economic situation, the employment scenario, and household income over a one-year horizon, the RBI said.

“Household spending weakened in the latest survey round, with essential spending showing signs of moderation while non-essential spending continues to contract,” the RBI said.

The survey was conducted through interviews on the phone from April 29 to May 10 in 13 major cities. Perceptions and expectations on the general economic situation, the employment scenario, the overall price situation, and income and spending were obtained from 5,258 households in these cities.


In the survey of households for inflation expectations, the RBI found the median inflation perception for the current period rose by 150 basis points from the previous round of the survey.

The median inflation expectation for both three months and one year ahead period increased by 70 basis points each in the latest survey round. About 60 per cent of the respondents expect higher general inflation over the next three months as well as over the next one year. However, the “expectations on general prices and inflation were mostly aligned with those for the food group”.

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