A survey released by the Reserve Bank of India (RBI) has showed that consumer confidence has collapsed to historic low amid the coronavirus pandemic.
“Consumer confidence collapsed in May 2020, with the Current Situation Index (CSI) touching historic low and the one year ahead Future Expectations Index (FEI) also recording a sharp fall, entering the zone of pessimism,” as per the Consumer Confidence Survey (CCS) released by the RBI.
According to the CCS, consumer perception on the general economic situation, employment scenario and household income plunged deeper into contraction zone, while expectations on general economic situation and employment scenario for the year ahead were also pessimistic.
“Overall consumer spending remained afloat, mostly due to relative inelasticity in essential spending ; consumers, however, reported sharp cuts in discretionary spending and also do not expect much improvement in the coming year,” it added.
The survey was conducted through telephonic interviews during May 5-17, 2020 in thirteen major cities, viz., Ahmedabad; Bengaluru; Bhopal; Chennai; Delhi; Guwahati; Hyderabad; Jaipur; Kolkata; Lucknow; Mumbai; Patna; and Thiruvananthapuram in view of the COVID-19 pandemic.
According to another survey, Perceptions and expectations on general economic situation, employment scenario, overall price situation and own income and spending were obtained from 5,300 households.
RBI has also conducted another study on ‘Households’ Inflation Expectations Survey’ that found households’ median inflation perception and expectations increased sharply in May 2020 as compared with the March 2020 round of the survey.
Participants were expecting increasing price pressure on food products. More households expect general prices and inflation to rise over a three-month horizon as compared to the previous round.
A total of 5,761 urban households participated in the survey.