Central idea

The Consumer Confidence Survey was conducted in the first half of March 2023 across 19 cities.
This article analyses the survey results, released this month, and breaks down the findings under different sections.

What is Consumer Confidence Survey?

The Reserve Bank of India (RBI) conducts a Consumer Confidence Survey to measure consumers’ perceptions of the prevailing economic situation.
The survey is conducted across various cities and measures consumer confidence on parameters such as the economy, employment, price, income, and spending.
The survey consists of questions regarding consumers’ sentiments over various factors in the current situation and future.

Here are a few parameters that help aggregate overall confidence:

Spending: The consumer is asked about the willingness to spend on major consumer durables, purchasing vehicles, or real estate. This measures the overall spending scenario on necessities as well as luxuries for the next quarter.
Employment: The consumer is asked about current and future ideas on employment situations, joblessness, job security, which reflects the sentiments of the current or expected employment in the country.
Inflation: The consumer is asked about interest rates and levels of prices of all goods, tracking the price expected by consumers and their spending on basic necessities.

CCI is a survey that is conducted every two months to measure how optimistic or pessimistic the consumers are regarding their financial situation.
The index measures the change in consumer perception on the financial situation in the last year and the future expectations index measures what the consumer thinks about his financial situation in the coming one year.
The main variables of the survey are: Economic situation, Employment, Price Level, Income and Spending.

The survey estimates current perceptions and a year-ahead expectations on the economy, employment, price, income, and spending.
The results show that consumer confidence continues to recover from its historic low of mid-2021, but still remains pessimistic at 87.0, a 2.2 point increase from previous results.
The assessment of inflation conditions improved for the current period reflecting a higher confidence in prevailing economic conditions.
With regards to spending, sentiments were positive with signs of improvement compared to the last round conducted in January 2023.

The survey shows that while consumer confidence is slowly recovering, it still remains pessimistic.
The survey results indicate positive sentiments on employment and spending, but a marginal dip in the country’s future economic situation.
Credit growth numbers indicate a rise in consumer spending.
The upcoming state and general elections could have an impact on the economy, and it remains to be seen how it will play out.