- The Consumer Confidence Survey was done in 19 cities during the first half of March 2023.
- This article examines the survey results, which were revealed earlier this month, and divides them into sections.
What exactly is a Consumer Confidence Survey?
- To assess consumers’ impressions of the current economic environment, the Reserve Bank of India (RBI) conducts a Consumer Confidence Survey.
- The study is done in multiple locations and assesses consumer confidence in areas such as the economy, employment, pricing, income, and expenditure.
- The study includes questions about customers’ current and prospective attitudes towards several topics.
Here are several parameters that contribute to total confidence:
- Spending: The consumer is asked if they are willing to spend money on big consumer durables, autos, or real estate. This metric assesses the entire spending scenario on needs and luxury for the upcoming quarter.
- Employment: The consumer is questioned about current and future beliefs about employment circumstances, joblessness, and job security, which indicates the customer’s feelings about existing or anticipated employment in the country.
- Inflation: The customer is questioned about interest rates and the levels of all goods’ prices, with the price predicted by consumers and their expenditure on essential requirements being tracked.
Concerning the Consumer Confidence Index (CCI)
- CCI is a bimonthly poll that determines how optimistic or pessimistic consumers are about their financial status.
- The index evaluates the change in consumer assessment of his financial status over the previous year, while the future expectations index measures how the consumer perceives his financial situation over the next year.
- The survey’s primary variables are: economic situation, employment, price level, income, and spending.
Current perceptions of the survey
- The study analyses current perceptions and expectations for the economy, employment, prices, income, and spending over the next year.
- Consumer confidence has recovered from its historic low of mid-2021, although it remains pessimistic at 87.0, a 2.2 point improvement from previous figures.
- The current period’s evaluation of inflation conditions improved, suggesting more confidence in present economic conditions.
- In terms of spending, feelings were favourable, with evidence of progress compared to the last cycle, which took place in January 2023.
What exactly does this mean?
- According to the study, while consumer confidence is slowly improving, it remains negative.
- The study results show optimistic attitudes about employment and consumption, but a slight decline in the country’s future economic condition.
- Credit expansion figures suggest an increase in consumer spending.
- The impending state and national elections may have an impact on the economy, but how it plays out remains to be seen.
Source: https://www.oecd-ilibrary.org/economics/consumer-confidence-index-cci/indicator/english_46434d78-en#:~:text=This%20consumer%20confidence%20indicator%20provides,unemployment%20and%20capability%20of%20savings.