The Reserve Bank of India, in its latest forward looking survey, says for the current period (January 2023 round of its bi-monthly survey), consumer confidence stood a shade lower than seen in the previous survey round and that improvement in respondents’ sentiment on income and spending was offset by pessimism on general economic and employment situation.
The survey obtains current perceptions (against a year ago) 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 during January 02 to 11, 2023, covering 6,047 respondents.
Going forward, however, households expect improvement in general economic, employment and income conditions, says the central bank.
The future expectation index (FEI) remained in "optimistic terrain" and recorded a marginal rise at 116.6 in the latest survey round, up from 116.3 during the previous time. Additionally, sentiments on current income improved further and moved to the optimistic zone for the first time in four years, the data shows.
On inflation, household perception of current inflation inched up by 10 basis points (bps) to 8.9 per cent in the latest round of the survey. Their expectations of both three months and one year ahead inflation, however, moderated by 10 bps each to 10% and 10.3%, respectively.
In manufacturing, the RBI survey shows at the aggregate level, capacity utilisation (CU) in the manufacturing increased for the third successive quarter to 76.3% in Q4 FY23 from 74.3% recorded in the previous quarter. "Manufacturing companies received more new orders in Q4:2022-23 as compared with the level in the previous quarter as well as in the corresponding quarter a year ago."
In its survey on "Professional Forecasters on Macroeconomic Indicators", the RBI says real gross domestic product (GDP) growth forecast for 2023-24 has been revised up by 10 basis points (bps) to 6.1 per cent; it is expected to grow by 6.5 per cent in 2024-25.
"Forecasters have assigned the highest probability to real GDP growth in the range 6.0-6.4 per cent for both 2023-24 and 2024-25,” the RBI says. The real gross value added (GVA) growth projection for 2023-24 has been revised up by 10 bps to 5.9%.
Professional forecasters have predicted annual headline inflation, based on consumer price index (CPI), will hover around 5.2% in 2023-24 and 4.7% in 2024-25.
The headline CPI inflation is expected at 5.6% in Q2; and in the range of 5.2-5.5% in the next three quarters.
A bank lending survey of senior loan officers’ assessment of credit parameters shows there was an "optimistic loan demand" condition in Q1 and expressed higher optimism on overall loan demand in Q2 and the third and fourth quarter of 2023-24.
The services and infrastructure outlook survey shows service enterprises are optimistic about overall business situation as well as their turnover and employment situation in Q2 and subsequent quarters.
