Households see high prices over next 3 mths; consumer confidence rises

Inflation for the current period is expected to increase by 40 basis points (bps) to 10.1 per cent when compared to the March 2022 round of the survey, according to the Households’ Inflation Expectations Survey conducted by the Reserve Bank of India (RBI) for May.

Households’ median inflation perception has increased by 10 bps and 30 bps for three months and one year ahead periods, respectively, says the survey conducted among 3,036 households across the country.

“Majority of the households expect general prices and inflation to remain high over three months and one year ahead horizons,” the RBI survey said.

Expectations for overall price and inflation over next one year were in sync with those for non-food products and cost of services, while three months ahead expectations were generally more aligned to those for food products and non-food commodities, it said.

The Reserve Bank’s bi-monthly monetary policy has forecast that inflation is expected to be above 7 per cent — much above the banking regulator’s comfort level — in the first two quarters of the current fiscal.