New Delhi: Consumer confidence in July continues to remain weak with the current situation index is still around the low level of all time, a survey by the Reserve Bank of India (RBI) shows on Friday.
Because most of the households reported lower income and higher price levels compared to last year, the current situation index (CSI) showed negative sentiment at 48.6, with signs of a minimum increase compared to 48.5 in May .
However, the survey of consumer confidence also shows consumers increasingly optimistic about the next year with the future expectation index (FEI) up from 96.4 in May to 104 in July.
“Driven by a substantial increase in the prospect of the General Economic Situation and Employment Scenario after reduced the second wave of Covid Pandemic, Fei returned to optimistic areas; respondents placed higher trust in household income in the future,” said the survey.
The bi-monthly survey studies the perceptions and expectations of respondents about the general economic situation, labor scenarios, the overall price situation and their own income and the level of expenditure and 100 are separating lines between pessimism and optimism.
With the second wave of Covid-19, economic growth in recent months has shown signs of recovery compared to the big contractions witnessed in the first wave of last year.
After a 7.3 percent contraction at 2020-21, GDP growth is expected to increase in the current fiscal.
While some high frequency data such as car registration, electrical demand, non-oil non-oil imports and sales of consumer resilience has shown a quick rebound after covid-related detention easing, RBI believes that maintaining growth must be a priority.
Further surveys show that sentiment about overall expenditure remains unchanged.
Higher expenses for important items are balanced with a decrease in non-essential expenditure.
It also showed that perceptions for the economic situation increased at -69.1 in July as against -75 in May, while the work reached -68.2 in July compared to -74.9 before.
However, both indicators continue to be in negative areas.
Previously on that day, the RBI kept the policy level unchanged for seventh consecutive time at 4 percent and continued with his accommodating attitude.