The September 2022 Consumer Confidence Survey of RBI shows that consumer confidence has been on the recovery path since July 2021. While people are confident about near-term recovery, they are not so confident about future consumption. Also, both current and future consumer confidence indices are well below the pre-pandemic high in March 2019. There is also greater visibility on spending on essential items but people are not yet ready to increase their spending on non-essential goods. UBS’ India Economic Perspectives survey of affluent consumers shows that more of India’s rich intend to increase spending in the coming days and expect their income level to rise going ahead. It bodes well for consumption in the economy if those with more disposable income loosen their purse strings.
Now, what are they spending on? While the RBI survey shows an increase in spending on essentials, the UBS survey shows a high purchase intention for cars, and two-wheelers, a diverging trend for property, and moderation for some consumer durables. The survey also notes that most people have switched to shopping online. “ Even as the economy has reopened, many of the post-Covid trends identified in previous consumer surveys continued in 2022. The survey results indicate that respondents continue to increase spending on online shopping, healthcare, online entertainment and household consumables,” says the UBS survey.