India’s consumer index falls to 48.5 in May 2021

India’s consumer index fell to a record low of 48.5 in May from 53.1 in March, shows a consumer confidence survey by the Reserve Bank of India. Survey respondents reported bleak future prospects, with the future expectations index dropping to 96.4 from 108.8 in the period under review. Household expenditures also dropped owing to consumers’ concerns about future economic and job prospects, the survey indicates.

The survey also points out, expectations of rising inflation are adding to current challenges of fiscal policy makers who halted interest rate curbs more than a year ago due to price-rise. Sticky underlying price pressures since then have kept the rate-setters from resuming the easing, including at their latest meeting that concluded Friday.

Households’ median inflation perception for the current period jumped by 150 basis points to 10.2 per cent while the inflation expectation for three months rose by 70 basis points to 10.8 per cent, compared to the March 2021 survey, the RBI said. Median inflation expectations for one-year ahead also remained at an elevated level at 10.9 per cent.