RBI Consumer Confidence Survey

The Reserve Bank released the results of its Consumer Confidence Survey (CCS) for the July 2022 round.

• The survey obtains current perceptions (vis-à-vis a year ago) and one year ahead expectations on general economic situation, employment scenario, overall price situation and own income and spending across 19 major cities.
• The latest round of the survey was conducted during July 07 to July 14, 2022, covering 6,083 responses.

Consumer Confidence Survey (CCS):

• The RBI conducts this survey every couple of months by asking households in 19 major cities — such as Ahmedabad, Bhopal, Guwahati, Patna, Thiruvananthapuram — about their current perceptions and future expectations on a variety of economic variables.
• These variables include the general economic situation, employment scenario, overall price situation, own income and spending levels.
• Based on these specific responses, the RBI constructs two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
• The main variables of the survey are- Economic situation, Employment, Price Level, Income and Spending.
• The CSI maps how people view their current situation (on income, employment etc.) vis a vis a year ago. The FEI maps how people expect the situation to be (on the same variables) a year from now.
• By looking at the two variables as well as their past performance, one can learn a lot about how Indians have seen themselves fairing over the years.

Significance of the Survey:

• Indicates how optimistic or pessimistic consumers are about their expected financial situation and the future economic situation of the country.
• Optimism means growth in demand leading to more production and enhanced economic growth.
• Pessimism means poor expected consumption leading to reduced production and low economic growth.
• The key driver of economic growth and is widely considered a leading economic indicator of household spending on consumption.
• Helps in monetary policy formulation: in formulating relevant monetary policy as per the market expectations and push and pull factors.