Consumer confidence in financial situation up in Dec: survey

The number of people who felt that their financial circumstances have improved went up marginally to 57.1% in December, 2011, from 56% in September, as per the latest consumer survey by the Reserve Bank of India (RBI).

However, optimism about an increase in future income, though high, has been sliding over the last four quarters, according to the sixth round of Reserve Bank's 'Consumer Confidence Survey December 2011'.

"Although the positive perceptions on household circumstances have marginally increased, about one fourth of the respondents continue to report weakening in this regard. The proportion of respondents reporting increase in income has been high but showed a decline over the last four quarters," the survey said.

Over 17% respondents reported that their household circumstances became worse off due to increase in price level.

This proportion has declined during the last four quarters, from 25.7% in March 2011 to 17.1% in December 2011, as per the RBI data.

The survey had 5,400 respondents from six metropolitan cities -- New Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad -- and was conducted in December 2011.

It found that optimism regarding increase in future income remain high, but has declined in absolute terms.

A total of 64% of respondents in December said they expect their incomes to rise during the next one year period, down from over 66% who had the same view in September 2011.

"About 46% of all respondents reported rise in current income as the main factor for increase in spending," the survey found.

The study also found that over 80% of the respondents were of the view that the current interest rates are high from borrowers viewpoint.

The degree of negative perceptions on price levels for now as well as in future are up in December 2011 as compared with September 2011.

RBI started conducting the quarterly survey on consumer confidence in 2010.

According to it, the change in consumer confidence has the potential to affect real economic activities through the changes in business sentiments and the findings of the survey on confidence level of consumers can be of use for policy making purposes.