How the COVID-19 pandemic hit Indian consumer confidence hard

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How the COVID-19 pandemic hit Indian consumer confidence hard

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Consumer confidence collapsed to record lows in May amid uncertainty due to the pandemic. Expectations for the general economic situation in the country and employment scenario also turned pessimistic for the year ahead.
Story: Shivani Sharma
Design: Mohsin Shaikh

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Consumer confidence collapsed in May 2020 with the current situation index (CSI) touching a historic low.

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Consumer perception of the general economic situation, employment scenario and household income plunged deeper into the contraction zone; Expectation from the existing economic situation and employment scenario for the year ahead were also pessimistic.

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Households' median inflation perception and expectations increased sharply in May 2020 as compared with the March 2020 round of the survey.

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Inflation expectation over three-month horizon exceeded that for the next year ahead period in quantitative terms.

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Real gross domestic product (GDP) is likely to contract by 1.5 per cent in 2020-21 but is expected to revert to growth terrain next year, when it is likely to grow by 7.2 per cent.

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Real private final consumption expenditure (PFCE) is expected to decline by 0.5 per cent during 2020-21 but likely to record 6.9 per cent growth during 2021-22.

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Real gross fixed capital formation (GFCF) is likely to register negative growth of 6.4 per cent in 2020-21 but likely to grow by 5.6 per cent in 2021-22.Source: RBI