Perceptions & Expectations

This week, the RBI released its perception & expectation survey results for the month of January 2021. The perception & expectation survey is just that. A survey with a sample population of people to get their perception of the current economic/financial condition and their expectation for the future. The results are quite contrary to what the results would have been had the same survey been run with a sample population of stock market participants.

People’s perception of the current general economic situation in Jan-21 is much worse than the year-ago period and has only slightly improved compared to May-20.

People, in general, think that the employment situation has currently significantly worsened,

that price levels have increased

and that income levels have decreased.

They are however just as hopeful about future income as they were about a year ago.

Far more people said in Jan-21 compared to the year-ago period, that their spending has decreased on both essential and non-essential items.

The key takeaway is that the euphoria in the stock markets is not nearly matched with the morose perception and the cautious expectation demonstrated by aam admi in daily life. But the good news is that this perception and expectation have improved in the last couple of months and we hope to see that trend continuing.

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