CONSUMER CONFIDENCE PICKS UP

MUMBAI: Consumer confidence has picked up this year, although households and companies view the current economic situation as significantly worse than a year ago, according to a Reserve Bank of India (RBI) survey released on Friday.

While consumer confidence for January remained low at 55.5 points, it was higher than November’s 52.3 points. However, for the year ahead consumer confidence showed an improvement in January 2021, to 117.1 points, up from 115.9 points in November 2020, reflecting optimism.

An index value below 100 represents pessimism, while above 100 signals optimism.

The survey, released in February, was based on responses from 5,351 households across 13 major cities.

“Though the current situation index (CSI) continued to improve from its all-time low registered in September 2020, weak sentiments emanated from downbeat perception on the major parameters, including the general economic situation, employment scenario, price levels and household incomes, when compared to a year ago,” the survey said.

Going forward, consumers expect improvement in the general economic situation and employment conditions during the next 12 months. “Overall spending remains in positive territory on the back of buoyant essential spending; over 70% of respondents expect non-essential spending to remain similar or decline over the next one year,” the survey added.

After reaching a historical low in May 2020 around the peak of covid-19-related lockdown and restrictions, the future expectations index (FEI) rose for four successive quarters and stood at 117.1 in January 2021.