Consumer Confidence Picks Up, Household Inflation Expectations Ease: RBI Surveys

Consumer confidence continues to recover from the historic low recorded in mid-2021, even though it remained in the pessimistic zone, according to the latest findings of the RBI's Consumer Confidence Survey.

The current situation index rose by 2.2 points to 87 on account of improved perceptions of the general economic situation, employment, and household income.

Households' overall outlook for the year ahead remained positive despite marginally lower optimism, according to the release on the survey. With an uptick in current perception, the sentiments on employment are nearing the levels seen around mid-2019.

Consumers are also optimistic about the employment outlook, as more than half of the respondents expect the job scenario to improve over the next year.

(Source: RBI)

Households' Inflation Expectations Ease  

Households' perception of current inflation declined by 70 basis points to 8.9%, according to the findings from the March 2023 round of the RBI's bimonthly Inflation Expectation Survey of Households.

Both three-month and one-year ahead inflation expectations moderated by 30 basis points each to 10.2% and 10.5%, respectively, as compared with January 2023.

Though expectations for general prices and inflation remained elevated, a relatively lower share of households—in comparison to the previous survey round—expect prices to rise. Households' expectations on overall prices were generally aligned with their perceptions of the prices of food and non-food items and the cost of services.

(Source: RBI)

Capacity Utilisation Improves

At the aggregate level, capacity utilisation in the manufacturing sector improved to 74.3% in the December quarter from 74% in the previous quarter, according to the latest round of the quarterly Order Books, Inventories, and Capacity Utilisation Survey conducted during the March quarter.

The seasonally adjusted CU for the third quarter, however, declined by 40 basis points and stood at 74.1%.

(Source: RBI)