Indian households expect inflation to fall in the coming months, according to surveys by the Reserve Bank of India.
(Bloomberg) — Indian households expect inflation to fall in the coming months, according to surveys by the Reserve Bank of India.
The perception of current inflation declined by 50 basis points in a September survey of 6,066 urban households in 19 major cities. Their expectations of three-month and one-year ahead inflation moderated by 90 bps and 40 bps respectively, the Reserve Bank of India said. The direction, rather than the absolute level, is important in household surveys.
Households expect lower price and inflationary pressures for most product groups, the surveys showed. Inflation expectations of all major respondents, except the self-employed category, has moderated, the RBI said.
The RBI on Friday kept policy rates unchanged and retained its inflation forecast at 5.4% for the year ending in March. It, however, surprised with a bond sale program, which would remove liquidity from the system and indirectly raise interest rates to control inflation.
A separate set of surveys showed consumer confidence, with regard to the general economic situation, employment scenario, overall price environment and income, “reverted to recovery path” for the current period.
General economic outlook as well as the prospects for employment, income and spending are expected to improve further over the next one year. The future expectations index also reached a four-year high in the latest survey round, the RBI said.
–With assistance from Ragini Saxena.
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