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Tracking economic indicators with Consumer Confidence Indices

The Consumer Confidence Indices are released by the RBI every two months. This indicator is the result of a large-scale survey on people's financial health and their plans. Find out more about it here

Topics
Consumer Confidence Index | Reserve Bank of India | Economic Survey

Krishna Veera Vanamali  |  New Delhi 

The Consumer Confidence Indices are released by the every two months. It is derived from the results of the Consumer Confidence Survey, in which hundreds of people across 13 cities including Ahmedabad, Bengaluru, Bhopal and Chennai are surveyed.

The survey obtains current perceptions as compared to one year ago as well as expectations for one year ahead. People from more than 5,000 households are surveyed about general economic situation, overall price situation and their own income and spending.

The survey based on current perceptions is also referred to as the Current Situation Index. While the survey based on future expectations is known as the Future Expectations Index. Both these indices consist of five main variables, which are economic situation, employment, price level, income and spending.

An index level below 100 represents pessimism, while a value above 100 indicates optimism.

To understand this, let us take a look at the results of the Consumer Confidence Survey for the September round, which is the latest data available. The survey for this round was conducted between August 29 and September 7, 2021.

The important Current Perceptions Index improved to 57.7 in September from 48.6 in July. The last time when the index was in the positive territory was in March 2019.

In the latest round of survey, consumers reflected lower pessimism on the prevailing general economic situation, employment scenario as well as household income and expenditure.

Consumers were deeply pessimistic in the past year due to the pandemic. The situation, however, is improving now. The index is at its highest level in a year. The Future Expectations Index also improved from 104 to 107, reflecting an increase in optimism. The survey is one of the most closely watched economic indicators to gauge the optimism or pessimism of consumers regarding their financial situation.

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First Published: Tue, November 23 2021. 08:45 IST
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