Consumer confidence fell to six-year low in September: RBI
The central bank said in its Consumer Sentiment Survey on Friday that both the current situation index and the future expectations index recorded declines.Updated: Oct 06, 2019, 09:25 IST
Consumer confidence slumped to a six-year low in September as sentiment around employment, income and spending declined among households, the Reserve Bank of India (RBI) has said.
The central bank said in its Consumer Sentiment Survey on Friday that both the current situation index and the future expectations index recorded declines.
According to the data, the Current Situation Index (CCI) fell to 89.4 in September from 95.7 recorded in July. It had touched 88 in September 2013.
Sentiment for the overall economy and employment also declined and people were less optimistic about their income over the year ahead, the survey also showed.
Almost half or 47.9% of the households surveyed felt the overall economic situation had worsened. However, this is lower than the 54% respondents who said in December 2013 that the economic situation was bad.
Out of those polled, 31.8% felt the situation will only worsen further in the coming year. In September 2013, 38.6% had expressed this view.
A majority of respondents or 52.5% felt the employment situation had worsened and 33.4% said the situation would only get worse in the coming year.
Respondents were a little upbeat on their own circumstances as only 26.7% said their own income had decreased. This figure was low only once before in November 2017 when 28% of the respondents said their income had dropped.
However, a majority or 53% see an increase in income in the coming year and only 9.6% feel it will go down.
The survey showed while sentiment for overall spending, primarily on essentials, remains strong, that for discretionary spending such as on consumer durables, travel, or even eating out weakened in September.
For the first time, 26% of those polled said their spending on non-essentials would go down in the coming year.
The survey by RBI was conducted across 5192 households in 13 major cities including Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad. Seven other state capitals of Bhopal, Guwahati, Jaipur, Lucknow, Patna and Thiruvananthapuram were also a part of the survey.
These households were asked about general perceptions and expectations on the economic situation, employment scenario, price situation, personal income and spending.
India, Asia’s third-largest economy, grew by just 5% in the June quarter, in the slowest pace since 2013 mostly hit by a slump in demand.
The RBI reduced its repo rate at which it lends money to commercial banks by 25 basis points to 5.15% on Friday for the fifth time in a row.
Friday’s cut takes the benchmark lending rate to the lowest in almost a decade and follows a number of fiscal steps taken by the government recently to spur growth, including a surprise reduction in corporate taxes.