The continuing Covid-19 pandemic, whose third wave is being witnessed in the country now, has severely dented consumer confidence in India, the Reserve Bank of India (RBI) has stated.
“While consumers remain concerned about the current situation, their expectations for the year ahead may portend confidence in economic recovery after subsidence of the pandemic,” said a bulletin released by the central bank.
The bulletin noted that sentiments were impacted in cities affected more by the pandemic than among residents in other cities.
Repeated bouts of Covid-19, induced by newly emerging variants, have weakened consumer spending spirit, the bank said, but noted that a similar attitude could be seen across the world even as there was a small and gradual uptick after a major slump in the early stage of the pandemic. However, the upward trend is yet to return to pre-pandemic levels.
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The pandemic-induced restrictions had hit household incomes and employment, which too had caused people to shore up savings and use for minimal and essential spending amid increasing prices, which again offset the consumer spirit.
“Sustained momentum in the ongoing reform measures by the government may help in improving the employment and income situation amongst households, leading to a gradual recovery in consumer confidence,” it said.
“With the proactive steps taken by the government and other public authorities, along with the ongoing vaccination programme, expectations have recovered relatively faster than perceptions,” the Bulletin said.