‘House­holds Less Con­fi­dent About Econ­omy’

The Economic Times - - Companies: Pursuit Of Profit - Joel.Re­bello @times­group.com

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.

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