Perceptions of households on economic situation remained in pessimistic zone: RBI survey

According to the RBI survey, respondents’ pessimism on the price level has also accentuated in the recent period.

The Consumer Confidence Survey, released by the RBI on October 4 soon after it unveiled the bi-monthly monetary policy, says the response for the current perception on the general economic situation showed 34.6 per cent saying "improved" as of September 2017, down from 44.6 per cent in September 2016.

The current perceptions of households on the general economic situation remained in the pessimistic zone for four successive quarters, with the outlook worsening, the RBI said.

40.7 per cent of respondents say the economic situation has worsened in September 2017 as against 25.3 per cent in the same period last year. The response for "one year ahead expectation" shows a decline to 50.8 per cent on the issue of economy "will improve" - down from 66.3 per cent in December 2016, the survey said.

The Consumer Confidence Survey was conducted in six metropolitan cities - Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi - and obtained 5,100 responses on household perceptions and expectations on the general economic situation, the employment scenario, the overall price situation and their own income and spending.

"The Current Situation Index (CSI) - a sub-index of the RBI's consumer confidence survey that measures overall consumer sentiments toward the present economic situation - slipped further into the pessimistic zone, reflecting deterioration in sentiments on the employment scenario, the price level and income," the RBI said.

The same set of parameters caused the Future Expectations Index (FEI) - a sub-index that measures overall consumer sentiments toward the short-term (six-month) future economic situation - to slip further in the September 2017 round relative to its reading in the June 2017 round, the RBI said.

Employment prospects have been the biggest cause of worry for respondents, with sentiment plunging further into the pessimistic zone; the outlook on employment has also weakened in the last two rounds.

The RBI survey said that as much as 43.7 per cent of respondents believed current perception about employment has "worsened", which is much higher than the 31.4 per cent in November 2016. The Indian Express has reported last week that several companies, including L&T, banks, telecom firms and tech companies, have cut jobs in the last 12 months.

According to the RBI survey, respondents' pessimism on the price level has also accentuated in the recent period. However, their outlook on inflation softened in the last two rounds.

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