Consumer Confidence
Consumer confidence is an economic indicator that measures the degree of optimism or pessimism that consumers feel about the overall state of the economy and their personal financial situation. It is a widely-used economic indicator, which serves as a barometer of the health of the economy from the perspective of the consumer. When consumer confidence in the economy is high, consumers make more purchases and save less. When confidence is low, consumers tend to save more and spend less.
The consumer confidence is measured through a bi-monthly Consumer Confidence Survey (CCS) conducted by the Reserve Bank of India (RBI). The survey obtains information on urban consumer sentiments and captures qualitative responses to questions pertaining to general economic conditions, household circumstances, income, spending, prices, etc. For each round of the survey, approx 5400 respondents (aged 21 years and above) are canvassed in metropolitan cities such as Bangalore, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai.
The CCS responses are measured through two indexes:
- Current Situation Index (CSI) - Consumer sentiment about current economic, employment, and price conditions as compared to a year ago.
- Future Expectation Index (FEI) - Expectations about economic, employment, and price conditions a year ahead
Consumer confidence is an economic indicator that measures the degree of optimism or pessimism that consumers feel about the overall state of the economy and their personal financial situation. It is a widely-used economic indicator, which serves as a barometer of the health of the economy from the perspective of the consumer. When consumer confidence in the economy is high, consumers make more purchases and save less. When confidence is low, consumers tend to save more and spend less.
The consumer confidence is measured through a bi-monthly Consumer Confidence Survey (CCS) conducted by the Reserve Bank of India (RBI). The survey obtains information on urban consumer sentiments and captures qualitative responses to questions pertaining to general economic conditions, household circumstances, income, spending, prices, etc. For each round of the survey, approx 5400 respondents (aged 21 years and above) are canvassed in metropolitan cities such as Bangalore, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai.
The CCS responses are measured through two indexes:
- Current Situation Index (CSI) - Consumer sentiment about current economic, employment, and price conditions as compared to a year ago.
- Future Expectation Index (FEI) - Expectations about economic, employment, and price conditions a year ahead
SUBJECT Variables
CURRENT SITUATION INDEX (CSI)
CSI reflects the consumer sentiment about current economic, employment, and price conditions as compared to a year ago. When the CSI shows current economic sentiment as positive, it can be viewed as a positive signal that the economy is strong or in recovery. Businesses, investors, and entrepreneurs can use this information (along with other market-specific indicators) to help gauge near-term demand for their products. Economic policymakers also consider consumer sentiment in setting targets on things like interest rates and monetary policy.
- Consumer confidence improved in Jan'24 over the previous month. Consumer confidence has remained in the negative territory since Mar'17 barring 2 exceptional quarters where the score moved slightly above 100.
- In Mar'24, 98.5% of net respondents believed the current overall economic and consumer situation is better than a year ago.
FUTURE EXPECTATION INDEX (FEI)
FEI reflects expectations about economic, employment, and price conditions a year ahead. Businesses often use it to help make better-informed decisions or adjustments in strategy such as investments in new projects or the launch of new products.
- The respondents to the survey in Mar'24 expressed optimism for the year ahead on all major parameters, except prices and inflation where consumers remain relatively pessimistic.
TO READ THE FULL ARTICLE
Get full access to the exciting content on The Mirrority by logging in
Support independent journalism
Even the very best of media houses in our country today are yielding to the pressure of click-bait journalism in order to survive. More than ever before, our country needs journalism that is independent, fair and non-pliant to the bureaucracy. Such journalism needs the support of like-minded readers like you to help us survive editorially and financially.
Whether you live in India or India lives inside you, help us continue to produce quality journalism with your contribution.
CONTRIBUTE