Consumer confidence dips to 5-year low

Chennai: Consumer confidence in the country continued to weaken in November and dipped to the lowest level since Narendra Modi came to power in 2014. Both the Current Situation Index and the Future Expectations Index in RBI’s consumer confidence survey was seen declining.  

As per the survey, the Current Situation Index fell to 85.7 in November from 89.4 in September. As per the survey any value below 100 indicates pessimism and that above 100 optimism, Since March 2017, the index has remained pessimistic, barring a brief relief in March 2019. However, this was the lowest level since March 2014. RBI’s index is available from that month.

The Future Expectations Index that assesses the one-year ahead expectations also fell to 114.5 from 118.0. It has been falling since March 2019.

The survey was conducted in 13 major cities— Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna and Thiruvananthapuram.

Perceptions and expectations on the general economic situation, the employment scenario, the price situation, income and spending are obtained from 5,334 households across these cities. All the parameters have witnessed a downward trend when the current perception was compared with the situation one year ago.

Most respondents perceived prices as having increased during the last one year, and they expect further rise in prices in the year ahead. The net response on prices was 84 per cent pessimistic.

The net response on the current perception over employment was 33 per cent pessimistic, On a net basis, around 69 per cent respondents found that spending has increased and 80 per cent thought it will further increase.

Further 51 per cent respondents thought that the general economic situation has worsened and 35 per cent thought it will worsen in the next one year.