India current economic situation significantly worse when compared to a year ago: RBI Survey

Consumer confidence has picked up this year, although households and companies view the current economic situation as significantly worse than a year ago, according to a Reserve Bank of India (RBI) survey released on Friday. Consumers perceived that the current economic situation was significantly worse when compared to a year ago, but it improved from November 2020 round of the survey. The current situation index (CSI) continued to improve from its all-time low registered in September. Weak sentiments emanated from downbeat perception on the major parameters, viz., general economic situation, employment scenario, price levels and household incomes, when compared to a year ago.

Going forward, consumers expect improvement in general economic situation and employment conditions during the next one year. While consumer confidence for January remained low at 55.5 points, it was higher than November's 52.3 points. However, for the year ahead consumer confidence showed an improvement in January 2021, to 117.1 points, up from 115.9 points in November 2020, reflecting optimism. Overall spending remains in positive territory on the back of buoyant essential spending; over 70 per cent of respondents expect non-essential spending to remain similar or decline over the next one year. After reaching the historical low in May 2020 round around the peak of Covid-19 related lockdown and restrictions, the future expectations index (FEI) increased for four successive quarters and stood at 117.1 in January 2021.

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