New Delhi: A survey by the Reserve Bank of India has showed that the consumer confidence amid the coronavirus pandemic has touched a historic low. Also Read - Bank Resolution Framework Changes Credit Positive: Moody's
“Consumer confidence collapsed in May 2020, with the Current Situation Index (CSI) touching historic low and the one year ahead Future Expectations Index (FEI) also recording a sharp fall, entering the zone of pessimism,” said RBI’s Consumer Confidence Survey (CCS). Also Read - RBI to Conduct Special 'Open Market Operations' to Pump up Liquidity
The survey added that consumer perception on the general economic situation, employment scenario and household income plunged deeper into contraction zone, while expectations on the general economic situation and employment scenario for the year ahead were also pessimistic. Also Read - Centre Discussing With RBI on One-time Loan Restructuring For Stressed Companies
“Overall consumer spending remained afloat, mostly due to relative inelasticity in essential spending; consumers, however, reported sharp cuts in discretionary spending and also do not expect much improvement in the coming year,” it said.
In view of the COVID-19 pandemic, the survey was conducted through telephonic interviews during May 5-17, 2020 in thirteen major cities: Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna, and Thiruvananthapuram.
Participants were expecting increasing price pressure on food products, the survey said, adding that more households expect general prices and inflation to rise over a three-month horizon as compared to the previous round.
The survey consisted of 5,761 urban households as participants.