Consumer confidence dips to 6-year low in September, reveals RBI survey; people less confident about income, jobs

Consumer confidence dipped to a six-year low in September as sentiment around jobs, income and discretionary spending declined, according to Reserve Bank of India (RBI)‘s survey released on Friday. The survey was conducted in 13 major cities. Both the current situation index and the future expectations index recorded declines, the RBI said in its consumer sentiment survey report. The Current Situation Index (CCI) dropped to 89.4 in September from 95.7 recorded in the July round of survey, the RBI data, released on Friday, showed. The Reserve Bank of India (RBI) on Friday (4 October) cut interest rates for a record fifth straight time to almost a decade low as it moved aggressively to revive economic growth languishing at six-year lows. With all six members of the Monetary Policy Committee (MPC) voting in favour of a rate cut and for retaining the accommodative stance, the benchmark repurchase rate was cut by 25 basis points to 5.15 percent. The previous lowest repo rate of 5 percent was recorded in March 2010. [caption id=“attachment_3460520” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] Following the rate cut, the reverse repo rate was reduced to 4.9 percent. According to the data, the Current Situation Index (CCI) fell to 89.4 in September from 95.7 recorded in July. It had touched 88 in September 2013. Sentiment for the overall economy and employment also declined and people were less optimistic about their income over the year ahead. Of the total respondents, 47.9 percent said the general economic situation had worsened and only 33.5 percent thought the situation had improved. About 53 percent expected the situation to improve in one year. A total of 52.5 percent felt the employment situation had worsened and 33.4 percent said the situation would only get worse in the coming year. “Respondents perceived an increase in the price level over the last one year and a majority of them expect prices to rise further in the coming year; as a result, sentiments on overall spending as well as essential spending remain strong, though sentiments on discretionary spending weakened,” said the survey.