The Reserve Bank of India’s consumer confidence index fell to a record low, with the second wave of Covid-19 affecting most people’s outlook on both the economy as well as employment. The Current Situation Index (CSI) and the Future Expectation Index (FEI) fell to an all-time low of 48.5 and 96.4 in the latest round of the central bank’s consumer confidence survey released on Friday.
Both numbers are at their lowest ever; on the basis of the survey, data for which is available since 2012, Indians have never felt as bad about their present or as unsure about the future.
The survey belies the expectations of the government, RBI itself, and many securities firms and banks that the second wave’s economic impact will be muted compared to the first . A collapse in consumer sentiment is bound to affect aggregate demand and therefore economic recovery. This magnifies the need for a policy intervention to boost confidence.
15.33 million Indians lose jobs in May
The survey was conducted from April 29 to May 10 across 13 major Indian cities. The second wave of Covid-19 infections, in terms of seven-day average of daily cases peaked on May 9. Thus, the latest round of the survey coincided with the worst phase of the pandemic in India. The latest CSI and FEI values are significantly lower than what they were a year ago, 63.7 and 97.9, when India was under a harsher lockdown and vaccines were not available.
{{/usCountry}}The survey was conducted from April 29 to May 10 across 13 major Indian cities. The second wave of Covid-19 infections, in terms of seven-day average of daily cases peaked on May 9. Thus, the latest round of the survey coincided with the worst phase of the pandemic in India. The latest CSI and FEI values are significantly lower than what they were a year ago, 63.7 and 97.9, when India was under a harsher lockdown and vaccines were not available.
{{/usCountry}}To be sure, values of other indices such as income and spending on non-essential items have been worse before the latest round, but net current perception on all major indices r continues to be negative, which means that the share of respondents who see things as having worsened exceeds those who believe there has been an improvement.
The country is still reeling under the pressure created by the onset of the second wave of the pandemic, with major states opting for lockdowns and shutting business activities for the month of April and May. While some of them have started to unlock in phases, majority of them have decided to carry forward the curbs for some more time.