The Indian Express (Delhi Edition)
Consumers optimistic about economic situation, income, employment for next one year: RBI survey
INDIAN CONSUMERS are quite optimistic about the general economic situation, income spending and employment conditions and also expect inflation to moderate in the one year ahead period, the latest surveys of the Reserve Bank of India showed.
Consumer confidence for the current period has been on a path of sustained recovery. The current situation index (CSI) rose by 3.4 points to 98.5 – its highest level since mid-2019, the RBI’S Consumer Confidence Survey (CCS) showed.
Consumer confidence for the year ahead improved further on the back of higher optimism in all CCS parameters, such as economic situation, employment, price level, income and spending.
Higher optimism resulted in the future expectations index (FEI) rising further by 2.1 points to 125.2 – also its highest level since mid-2019, the survey
showed.
CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period as compared with one year ago and a year ahead, respectively.
Households’ sentiments on general economic situation and employment prospects recorded notable improvements for both the current period as well as the upcoming year. Respondents assessed a better income situation compared to a year ago and expected further rise in income in the year ahead, the survey showed.
The survey was conducted during March 2-11, 2024 in 19 major cities, with responses from 6,083 urban households. Female respondents accounted for 50.8 per cent of this sample.
The RBI’S Households’ Inflation Expectations survey showed that Households’ inflation expectations for both three months and one year ahead moderated by 20 basis points (bps) each to 9 per cent and 9.8 per cent, respectively. One basis point is one-hundredth of a percentage point.
The share of households expecting overall prices and inflation to increase over the next three months and one year moderated for general prices as well as for most of the product groups, when compared to the previous survey round.
Households’ expectations on general price for one year horizon remained closely aligned with food prices and housing related expenses, the survey showed.
For the fiscal 2025, the RBI has projected inflation to be at 4.5 per cent with Q1 at 4.9 per cent; Q2 at 3.8 per cent; Q3 at 4.6 per cent; and Q4 at 4.5 per cent.
In the monetary policy announced on Friday, RBI Governor Shaktikanta Das the uncertainties in food prices continue to pose challenges.
Under these circumstances, monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission of the past actions, he said. In the policy, the Monetary Policy Committee (MPC) left the policy rate unchanged at 6.5 per cent.