Consumer confidence remains intact despite inflation expectations: RBI survey | So Good News


Households are hoping for an increase in income but consumer confidence is not deterring RBI's survey

Households expect income to rise but consumer confidence remains subdued: RBI survey

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The Reserve Bank of India (RBI) in its consumer confidence survey in September 2022 found that most households paid more, mainly due to the rise in the prices of essential goods and expects these shares to rise again in the next one year.

Almost three-quarters of those surveyed expect income to increase over the next 12 months, while 20% expect this trend to continue.

It should be noted that inflation has remained above the RBI’s comfort zone of 2-6% from January 2022, mainly due to key food and energy prices. The central bank has raised repo rates, where it lends money to commercial banks, by 190 basis points in the past few months to reduce liquidity in the economy, but that could push rates lower. Announcing the results of the Monetary Policy Committee (MPC) – the RBI’s interest rate body – on Friday, Governor Shaktikanta Das said the central bank has kept the inflation target for the financial year 2022-23 at 6.7%, and Q2 at 7.1%; Q3 at 6.5%; and Q4 at 5.8%.

“Many families have said that they are spending a lot of money at the moment, which happened mainly because of spending important money; About three-quarters of respondents expect a further increase in spending over the next year and another 20 per cent expect it to remain the same,” according to the recently published Consumer Confidence Survey (CCS).

But the rate of inflation did not affect the opinion of consumers, since the confidence of the Consumer for the next one year, as measured in the future (FEI), remains stable and the expectation of the aggregate level remains close to its level in the previous survey, the survey showed.

“Consumer confidence has been improving since July 2021 after the COVID-19 pandemic subsided; Although the CSI remained in negative territory, it improved in the latest survey due to positive economic sentiment and spending,” according to RBI’s statement on this research.

Households have expressed pessimism about their current income but many expect to receive more money in the next one year. Job prospects have declined since March 2022 in the survey but remained in a positive environment, the survey added.

The RBI’s Consumer Confidence Survey (CCS) finds out the current situation (as it was a year ago) and one-year expectations for the economy, employment activities, overall prices and income and expenditure in 19 major cities. The most recent survey was conducted on September 1-September 10, 2022, 6,062 responses.


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