Indian households expect inflation to moderate in the coming months after a spurt in the current period, mainly on account of food prices, according to surveys by the Reserve Bank of India.
(Bloomberg) — Indian households expect inflation to moderate in the coming months after a spurt in the current period, mainly on account of food prices, according to surveys by the Reserve Bank of India.
The perception of current inflation inched up by 10 basis points in a July 1-10 survey of 6,025 urban households in 19 major cities.
Their expectations of both three-month and one-year ahead inflation, however, moderated by 10 bps each, the Reserve Bank of India said. The direction, rather than the absolute level, is important in household surveys.
The Reserve Bank of India on Thursday kept policy rates unchanged but raised its inflation forecast by 30 basis points to 5.4% for the year ending in March due to an increase in food prices.
The rise is temporary and can be ignored, Governor Shaktikanta Das said.
A separate set of surveys showed consumer confidence, with regard to the general economic situation, employment scenario, overall price environment and income, slipped for the current period.
After persistent recovery for almost two years, the current situation index stood a shade lower than that witnessed in the previous survey round as an “improvement in respondents’ sentiment on income and spending was offset by somewhat higher pessimism on general economic and employment situation.”
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