Battered consumer confidence amid Covid-19 sees marginal uptick after hitting all-time low: RBI survey

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Published: April 5, 2020 3:49:32 PM

The expectations for the year ahead, gauged by the future expectations index (FEI) remained largely unchanged from 115.1 in January 2020 to 115.2 in March 2020, showed the RBI survey.

The negative consumer sentiment on economic situation improved from -27.8 in January 2020 to -23.9 in March 2020.

Consumer confidence, measured by the current situation index (CSI), battered due the Coronavirus outbreak saw a marginal uptick in March 2020 to 85.6 close to the all-time low of 83.7 in January this year, showed March 2020 Consumer Confidence Survey by the Reserve Bank of India (RBI). On the other hand, the expectations for the year ahead, gauged by the future expectations index (FEI) remained largely unchanged from 115.1 in January 2020 to 115.2 in March 2020, according to the survey conducted before the Covid-19 lockdown. “Sentiments on the general economic situation, employment scenario and household income remained pessimistic; however, there were some improvements in expectations for the year ahead,” RBI said in the survey conducted during February 27 – March 7, 2020. 5,365 households across 13 cities responded in the survey.

While the negative sentiment on economic situation improved from -27.8 in January 2020 to -23.9 in March  2020, the negative perception around employment, price level, and household income improved from -33.1 to -30.5, -88.7 to -84.6, and -5.0 to -2.2 respectively. On the other hand, household spending sentiment, despite positive, showed a sign of deterioration from 73.1 to 69.2. Across these five variables except price level, the expectations for next year vis-à-vis the current situation saw wafer-thin improvement.

Also read: RBI Survey: Business sentiment nosedives as Covid-19 crisis deepens; here’s what survey reveals

The adverse impact of the Covid-19 pandemic, as per another RBI survey, on the industries and business among the manufacturing community across sectors also saw their sentiments sinking during Q4 FY20 while for the current quarter there is “stark pessimism.” Across five parameters of production, order books, employment, capacity utilisation, and overall business climate, the sentiment declined to -37.5 per cent from 13 per cent (before Covid-19 impact assessment), -41.9 per cent from 16.3 per cent, -14.6 per cent from 4.3 per cent, -40.4 per cent from 22.2 per cent, and -35.4 per cent from 26.1 per cent respectively. The survey of 48 companies conducted during March 18-20, 2020 followed the results of 89th round of the Industrial Outlook Survey of 860 manufacturing businesses for Q4 FY20 that, in contrast, showed optimism among the community.

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