Consumer Confidence Survey By RBI

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What is Consumer Confidence Index (CCI)?

The Consumer Confidence Index is a survey that measures how optimistic or pessimistic consumers are regarding their expected financial situation.
It is based on the premise that if consumers are optimistic, they will spend more and stimulate the economy but if they are pessimistic then their spending patterns could lead to a recession.

It is conducted by the Reserve Bank of India (RBI) in major cities of India over 5,000 respondents.
In view of the Covid-19 pandemic, the survey was conducted through telephonic interviews during
May 5-17, 2020 in thirteen major cities
The survey measures consumer perception (current and future) on five economic variables – economic situation, employment, the price level, income and spending.
The current situation index measures the change in consumer perception over an economic issue in the last one year
While the future expectations index measures what consumer thinks about the same variables, one year ahead.

The current situation index (CSI) touched a historic low of 63.7 in May 2020 round of the survey,
as against 85.6 in March this year.
The future expectations index fell below 100 to 97.9 in May 2020, from 115.2 in March.

Results of the survey indicates further expected deceleration in consumption expenditure since households, anticipating job losses and economic slowdown, will reduce their spending.

The households inflation expectations survey released by the RBI also showed that families expect a sharp increase in inflation in the coming months on account of rising food prices.
Along with the consumer confidence surveys,
The survey of professional forecasters on macroeconomic indicators conducted in May show that real GDP is likely to contract by 1.5% in 2020-21.

The findings show a mirror to the government.
The Rs 20-lakh crore economic package announced has done little to boost demand.
The COVID-19 scenario has worsened the already problematic unemployment scenario.
According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate spiked to about 23% in April and even higher to 23.48% in May.