Consumer outlook positive despite current economic woes: RBI survey

Consumer confidence in the country remained more or less positive with significant improvement in future expectations even as perceptions on the current economic situation in June 2014 remained at the threshold level unchanged from the March 2014 level.

However, the latest round of RBI survey found significant improvement in overall consumer confidence index, which reflected improvement in the positive perceptions.

The net responses on economic outlook witnessed consistent increase over the last three rounds. However, net response on current economic condition remained negative and the gradual improvement observed till the last round got reversed, RBI said in a release.

The net responses on current and future household circumstances witnessed an increase over the last round. Positive perceptions on salary and business income have contributed to the significant improvement in the perceptions on household circumstances, according to the survey report.

The consumer confidence survey reflects successive improvement in income expectations over the last four quarters. More than 60 per cent of the respondents expected increase in income 12 months ahead.

The respondents reported higher confidence on spending. The net response on future spending increased and witnessed positive sentiments for the first time in the last four rounds of surveys, as more than one third of respondents reported increase in future spending.

Income and cost of consumer goods were two major factors which influence spending perceptions, according to the survey.

During the current round, RBI said, about 25-30 per cent of respondents felt that it was a good time for making outlays for big ticket purchases, viz, house, durable goods and gold. Less than 20 per cent of the respondents felt that it was the right time for purchasing motor vehicle.

Net response on current employment situation turned positive after three rounds. There has been overall improvement in the employment outlook.

On inflation, current sentiments as well as future expectations do not show any improvement.

The consumer confidence survey provides an assessment of respondents' perception spread across six metropolitan cities such as Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi.

The survey, carried out in four blocks covering 5,000 respondents, assessed respondents' broad perceptions on general economic conditions and own financial situation based on information on current situation as compared with a year ago and expectations for a year ahead.