RBI survey says consumer confidence up; sentiment on jobs, inflation still negative

The Reserve Bank of India survey for May 2023 says that overall consumer confidence has increased over the same period last year but the sentiment remains negative on employment and inflation.

"Consumer confidence for the current period, as compared to a year ago, has been rising since the second wave of the Covid-19 pandemic. The current situation index (CSI) improved further by 1.5 points from the previous survey round on the back of improved assessment for all the survey parameters, barring essential spending," say the survey results released on Thursday.

The survey obtains current perceptions and one-year-ahead expectations on general economic situation, employment scenario, overall price situation and own income and spending across 19 major cities.

The latest round of the survey was conducted between May 2 to May 11, 2023, covering 6,089 respondents. Female respondents accounted for 52.3% of this sample, said RBI.

Respondents remained optimistic on general economic situation in the year ahead. The Future Expectations Index also improved marginally in the latest survey round. Households' current perception on general economic situation has been improving steadily since September 2022; their one year ahead outlook has also been on uptrend notwithstanding a marginal dip in March 2023.

"With a substantial improvement in May 2023, households' sentiment on current income inched closer to the neutral zone and they remain fairly optimistic on employment conditions and future earnings over the next one year," said the results.

The respondents have said that they have negative sentiments about the country's economic situation, employment, price level, income and consumer confidence index but compared to previous year, there are signs of improvement in the above sections.

In May 23, 48.9% of the respondents said the general economic situation has worsened compared to March 2023 while 19% said the situation has remained the same; 32.1% said the situation has improved. But one year ahead, majority (51%) of the respondents are confident of the economic situation improving while 33.2% think the situation will worsen. 

With regards to employment, 47.7% respondents said the perception and expectations on employment has worsened and another 20.2% said it remained the same. Only 32.1% said the situation has improved on the employment scene in the country. Here too, majority (52.1%) of the respondents were confident that the situation will improve in the next year while 29.2% said it will worsen. 

Sentiments on inflation are negative as 92.2% of the respondents said the price level has increased in May 2023 compared to March and just 1.4% said that the prices have come down. Respondents are not confident that the price level will decline or remain the same in one year ahead as 82.7% said that the prices will increase and 7.3% are confident that the price level will decline.

Majority of the respondents said sentiments on income remained the same will 26.3% said it decreased and 23.9% said it improved. Majority are also hopeful that their income will increase in the next one year will 39.4% said it will remain the same.

Respondents said that the spending on essential items increased and in the one year ahead it will increase further. But on non-essential items, the respondents' perception decreased in the current situation but 35.3% said it will increase in the one year ahead.