Reserve Bank of India survey: Consumers not optimistic about economy, employment situation

People are not optimistic about the country’s general economic situation and the employment scenario. This was revealed in the September 2018 Reserve Bank of India Consumer Confidence Survey. The survey is an indicator of consumer confidence to buy goods and services. The current situation index waned in the September 2018 round reflecting worsening of consumers’ perception on the general economic situation and the employment scenario. Perceptions on the current general economic situation dropped as compared with the preceding round and remained in the pessimistic zone; over the 12-month ahead horizon, consumers’ outlook remained broadly unchanged to that in the previous round. The people felt the economic condition had worsened. Around 44.3 percent felt it had while 33.7 percent said it had improved. However, there was optimism in people with 53.1 percent stating that situation would improve in the one-year-ahead expectations survey. Responses on the general economic situation largely tracked those on the employment situation with the outlook on employment for the year ahead dipping below expectations in the previous round. On the question of jobs, there was not much optimism among the people who participated in the survey. Over 45.5 percent said that employment prospects had worsened against 35.2 percent who felt it had improved. Around 26.4 percent felt the situation was the same. However, 54.1 percent felt the situation would improve in the one-year-ahead expectations survey.  While the majority of the respondents remained highly pessimistic about the price situation, there was a slight improvement in expectations one year ahead. A large number – 88.3 percent felt prices had gone up while an almost equal number at 80.1 percent felt prices would remain high in the year-ahead period. Opinion was almost equally divided on the direction of change in income in the last one year, but the majority felt that income would increase in the next year. The survey portrays reduced optimism on spending by consumers, particularly in respect of non-essential items. The survey was conducted in 13 major cities – Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna and Thiruvananthapuram - and obtained 5,364 responses on households’ perceptions and expectations on the general economic situation, the employment scenario, the overall price situation and their own income and spending. .