Consumer confidence collapsed in May 2020, with the current situation index (CSI) touching a historic low and the one year ahead future expectations index (FEI) also recording a sharp fall, entering the zone of pessimism, according to Reserve Bank of India’s latest Consumer Confidence Survey (CCS).
The CSI fell to 63.7 in May 2020 vis-a-vis 85.6 in March 2020.The FEI was down to 97.9 vis-a-vis 115.2.
The decline in these indices clearly shows that the COVID-19 pandemic and the resulting lockdown and slowdown has cast a long shadow on the economy.
The central bank said consumer perception on the general economic situation, employment scenario and household income plunged deeper into contraction zone, while expectation on general economic situation and employment scenario for the year ahead were also pessimistic.
In view of the Covid-19 pandemic, the survey was conducted through telephonic interviews during May 5-17, 2020 in 13 major cities. Responses
were obtained from 5,300 households across these cities.
As per CSS, 74.4 per cent (52.3 per cent in the March 2020 survey) of the respondents felt that the current perception on the general economic has worsened; 11.2 per cent (19.3 per cent) said it has remained same; and 14.4 per cent (28.4 per cent) said it has improved.
Further, 51.4 per cent (34.7 per cent) of the respondents felt that the one-year ahead expectation on the general economic will worsen; 9 per cent (15.6 per cent) said it will remain same; and 39.6 per cent (49.8 per cent) said it will improve.
Employment
According to the Survey, 67.4 per cent (55.7 per cent) of the respondents felt that the current perception on employment has worsened; 13.4 per cent (19.1 per cent) said it has remained same; and 19.2 per cent (25.2 per cent) said it has improved.
Further, 47.4 per cent (34.1 per cent) of the respondents of the respondents felt that the one-year ahead expectation on employment will worsen; 11.1 per cent (17.1 per cent) said it will remain same; and 41.5 per cent (48.8 per cent) said it will improve.
Income
As per the Survey, 53.4 per cent (24.9 per cent) of the respondents felt that the current perception on income has decreased; 34 per cent (52.4 per cent) said it has remained same; and 12.6 per cent (22.7 per cent) said it has increased.
Further, 21.4 per cent (7.8 per cent) of the respondents felt that the one-year ahead expectation on income will decrease; 39.1 per cent (40.2 per cent) said it will remain same; and 39.5 per cent (52 per cent) said it will increase.
Spending
According to the Survey, 56.1 per cent (72.6 per cent) of the respondents felt that the current perception on spending has increased; 31 per cent (24 per cent) said it has remained same; and 12.9 per cent (3.4 per cent) said it has decreased.
Further, 64.3 per cent (75.8 per cent) of the respondents of the respondents felt that the one-year ahead expectation on spending will increase; 27 per cent (20.7 per cent) said it will remain same; and 8.7 per cent (3.5 per cent) said it will decrease.
Price level
As per the CSS, 79.1 per cent (87.2 per cent) of the respondents opined that the current perception on price level has increased; 17.5 per cent (10.3 per cent) said it has remained same; and 3.4 per cent (2.6 per cent) said it has decreased.
Further, 75.8 per cent (78.1 per cent) of the respondents opined that the one-year ahead expectation on price level will increase; 14.8 per cent (14.2 per cent) said it will remain same; and 9.4 per cent (7.7 per cent) said it will decrease.