With consumer’s perceptions on general economic situation and employment scenario weakening further, the current situation index (CSI) fell to a new low of 48.5 in May from 53.1 in March.
The consumer confidence survey also showed consumers turning increasingly pessimistic about the year ahead, with future expectation index (FEI) dipping from 108.8 in March to 96.4 May.
The bi-monthly survey studies perceptions and expectations of respondents on general economic situation, employment scenario, overall price situation and their own income and spending levels and 100 is the dividing line between pessimism and optimism.
While the future expectations moved into negative territory for second time since the onset of the Covid-19 pandemic, the current situation index has remained in negative zone since July 2019.
The major reason for deteriorating consumer sentiments can be largely attributed to the economic situation of the country which is expected to have taken a beating amidst the second wave of Covid-19.
The country is still reeling under the pressure created by the onset of the second wave, with major states opting for lockdowns and shutting business activities for the month of April and May. While some of them have started to unlock in phases, majority of them have decided to carry forward the curbs for some more time.
Besides, rise in unemployment levels for the fourth consecutive month in May also marred consumer confidence.
According to data by Centre for Monitoring Indian Economy (CMIE), over 15 million jobs were lost during May. Urban jobless rate also rose to highest in past one year at 18 per cent.
The Central Bank in its survey also pointed to weakened household spending levels with essential spending showing signs of moderation even as non-essential spendings continued to contract.
Earlier in the day, the RBI kept policy repo rates unchanged for the sixth straight time and announced additional measures to revive economic growth.
It also revised FY22 gross domestic product (GDP) forecast to 9.5 per cent, while the inflation forecast was bumped up by 10 bps to 5.1 per cent.