‘Households Less Confident About Economy’
Mumbai: Indian households are less confident of the current economic situation as people are uncertain about their immediate income, employment and spending capabilities, a Reserve Bank of India survey showed.
Current perceptions of households of their economic condition worsened in December 2016 with all expectations, except on price and the levels of inflation plummeting. The RBI-monitored current situation index — which provides a gauge of households’ assessment of general economic conditions like employment, their own income and the price situation — fell sharply to 102.0 in December from 108.7 the previous month. The survey on consumer confidence captures households perceptions compared with a year earlier and expectations for the year ahead, on a three point scale: ‘improved’, ‘ remained the same’ and ‘worsened’. As many as 4,752 households were surveyed in the cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. The results are released with the RBI’s bimonthly policy announcement.
“On a net basis, 15.4% of respondents assessed that economic conditions improved relative to the position a year ago, as against 25.6% in November 2016 and19.4% in September 2016. (However) respondents’ optimism on future economic conditions maintained its improving profile,” the RBI said.
Households particularly are less confident of their income levels as their perception on that parameter plunged to1.3 in December from 20.1 in November, “a level not seen in the recent past.” The outlook on income one year ahead also fell, to 43.1 from 47.7. Employment expectations dropped to a negative 8.3 versus 6.2 in November.
However, the survey on inflation expectations found a sharp decline in those for both three months and one year ahead periods. Only 68.1% of respondents expect general level of prices to increase one year ahead, compared with 86.3% in November.
This survey covered 5,162 urban households across 18 cities in various employment categories.