Indian consumer confidence is deepening new lows, adding to a string of grim data in an economy crushed by the world’s worst coronavirus outbreak.
The current situation index fell to a record 48.5 in May from 53.1 in March, according to the Reserve Bank of India’s consumer confidence survey, where 100 is the level separating pessimism optimism.
Respondents were also gloomy about the outlook for the coming year, with the Future Expectations Index falling to 96.4 from 108.8 during the period under review, the RBI said.
“Household spending also weakened in the latest survey,” according to the RBI, which cited consumer concerns about the economic situation and job prospects. Even essential spending “showed signs of moderating while non-essential spending continued to contract.”
This is bad news for an economy primarily driven by consumption, with high-frequency indicators gradually showing weakness in everything from retail activity to road congestion and electricity demand to electricity. rising unemployment levels.
Another survey indicated that inflation expectations were well anchored, adding to the challenge for monetary policy makers who halted interest rates more than a year ago due to the gains in price growth. Since then, persistent underlying price pressures have kept rate-setters from resuming easing, including during their last meeting which ended on Friday.
The median perception of household inflation for the current period jumped 150 basis points to 10.2% while three-month inflation expectations rose 70 basis points to 10.8%, compared to the March 2021 investigation, the RBI said. One-year median inflation expectations also remained high at 10.9%.