Consumer Confidence Up, Household Inflation Expectations Ease: RBI Surveys

Consumer confidence continued to pick up while household inflation expectations eased, according to the latest round of surveys by the central bank.

Consumer confidence for the current period, as compared to a year ago, has been rising since the second wave of the Covid-19 pandemic, according to the RBI surveys.

The current situation index improved further by 1.5 points to 88.5 from the previous survey round on the back of improved assessment for all the survey parameters, barring essential spending. Respondents remained optimistic about the general economic situation for the year ahead. The future expectations index also improved marginally in the latest survey round.

The survey obtains current perceptions (versus a year ago) and one-year expectations on the general economic situation, employment scenario, overall price situation, and own income and spending across 19 major cities. The latest round of the survey was conducted between May 2 and May 11 and covered 6,089 respondents.

Household median inflation perception for the current period eased by 10 basis points to 8.8%, according to the latest round of the bi-monthly inflation expectations survey of households. Inflation expectations for both periods — three months and one year ahead — moderated by 10 basis points each from the March 2023 level to 10.1% and 10.4%, respectively.

Among respondent categories, inflation expectations for retired people were the highest. As compared to the last survey round, the share of households expecting a price rise has come down for both time horizons. Three-month and one-year-ahead expectations on overall prices had the highest coherence with respondents’ perceptions on the cost of services.