Consumer Confidence Falls To All-Time Low, RBI Survey Shows

Consumer confidence in the current period, which has been in negative territory since July 2019, fell to a record low amid disruptions caused by the second wave of the Covid-19 pandemic.

The current situation index dropped to 48.5 in May, according to a survey conducted by Reserve Bank of India, from 53.1 in March.

The future expectations index, which moved to pessimistic territory for the second time since the onset of the pandemic, fell to 96.4 from 108.8.

While consumer confidence in the current period worsened in terms of perceptions on general economic situation and employment, there was a decline in expectations on general economic situation, employment scenario and household income over a one-year horizon.

Household Inflation Expectations Rise

Households expect prices to rise in the current period and over the course of the year.

Households’ median inflation perception for current period rose by 150 basis points to 10.2% in May, from 8.7% in the previous round of the survey.

Median inflation expectation for the next three months and one-year ahead period increased by 70 basis points each in the latest round, according to the survey.