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.