The Reserve Bank of India (RBI) on February 8, 2023 released the results of the bi-monthly Consumer Confidence Survey (CCS) and the Household Inflation Expectations Survey.
The CCS presents the current perceptions (vis-à-vis a year ago) and one-year ahead expectations on general economic situation, employment scenario, overall price situation and own income and spending across 19 major cities. These include, Ahmedabad, Bengaluru, Bhopal, Bhubaneshwar, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kolkata, Lucknow, Mumbai, Nagpur, Patna, Thiruvananthapuram, Chandigarh, Ranchi and Raipur.
Elsewhere, the household inflation expectations survey highlights the households’ inflation perception for the current period as of January 2023.
The latest round of CCS was conducted from January 2-11, 2023, and involved 6,047 respondents.
According to the survey, consumer confidence improved both for the current period as well as for the year ahead.
About 17 per cent of the respondents expected the economic situation to improve in the year ahead period as against 11.6 per cent in the previous survey in November 2022.
The sentiments were positive on both the income spending as well at 47.6 per cent and 70.8 per cent as against 44.9 per cent and 70.2 per cent, respectively. Sentiment was also positive for employment at 21.6 per cent as against 21.2 per cent in the November 2022 survey.
That said, the current perception remained negative for all parameters, including economic situation, employment, price level, income and consumer confidence index. Only spending remained positive but that too with deterioration compared to the previous survey in November 2022.
For employment, the sentiment was negative with further sign of deterioration compared to last round. For the others, though sentiment remained negative, but there were signs of improvement compared to the previous survey.
“The current situation index (CSI) 2 continued on its recovery path for the ninth survey round since the historic low recorded in mid-2021 and increased by 1.3 points in January 2023 on the back of improved sentiments on general economic situation and household income,” the survey said.
Though the consumers’ sentiment on current expenses witnessed some moderation, but their expectations on overall spending improved marginally for both essential and non-essential items.
“One-year ahead outlook, as reflected by the future expectations index (FEI), also rose by 1.3 points to its two-year high on the back of improved optimism on general economic situation, employment and income over the next one year,” the survey said.
Household Inflation Expectations Survey
The survey was also conducted from January 2-11, 2023 across 19 major cities, involving 6,024 urban households. Women accounted for 49.7 per cent of this sample size.
According to the survey, households’ inflation perception for the current period moderated by 20 basis points (bps) to 9.6 per cent in January 2023.
Inflation expectation of households rose by 10 bps for the three-month ahead period, whereas their one-year ahead expectations remained unchanged from November 2022 round of the survey.
“Within the consumption categories, the proportion of respondents perceiving price rise was highest for the food group for both the horizons, as also witnessed in the previous two survey rounds Respondents expect higher price pressures for household durables and cost of housing over the next three months, when compared to the previous survey round,” the survey said.
City-wise, the range of inflation expectations was 7.4-12.8 per cent over three-month horizon and 8.3-13.3 per cent over one year horizon, the survey said.
According to the survey, 78 per cent of those surveyed said the cost of housing prices would increase against 76 per cent in the next three-month period. In the year ahead period, about 87.4 per cent of those surveyed said the cost of housing prices would increase against 86.5 per cent in the previous survey in November 2022.
About 88 per cent believed food prices would increase in the year ahead period as against 87.1 per cent in the November 2022 survey. That said 84.6 per cent respondents said the food prices would increase as against 85 per cent respondents in the three-month ahead period.
For household durables though, 80.8 per cent said prices would increase as against 77.6 per cent in the previous survey in November 2022.
For non-food products, 86.7 per cent expected prices to increase as against 85 per cent in the previous survey in the year ahead period.