Households expect inflation to rise in the next three months to one year driven mainly by food prices, housing and cost of services, according to a survey by the Reserve Bank of India.
Households see inflation in India rising by 20 basis points each over the next three months and year, according to the households’ inflation expectations survey released by the RBI on its website Thursday.
The RBI’s July 2024 round of bi-monthly inflation expectations survey of households in 19 major cities, captures responses from 6,091 urban households.
Households’ median perception of current inflation rose by 20 basis points (bps) to 8.2% in the latest survey round. A larger share of households expects higher general prices and inflation as compared to the May 2024 survey round.
Marginally higher price and inflationary pressures were reported across major product groups. For one year ahead period, inflation expectations were closely aligned to food prices, housing and cost of services.
Separately, the RBI’s 106th round of quarterly industrial outlook survey (IOS). The manufacturers reported pressure on account of input costs and salary outgo while profit margins were reported to deteriorate in Q1FY25. However, respondents reported some easing in pressures from the cost of finance.
Demand conditions are expected to improve during the second half of the current financial year, according to the survey. Manufacturers expect input cost pressures to persist and anticipate better pricing power in terms of higher growth in selling prices on the back of improved demand conditions in H2FY25.
Business sentiment in the Indian manufacturing sector, which moderated for H1, is expected to improve during the second half of the current financial year.
In the IOS survey, 1,351 companies responded, which was conducted during April-June 2024.
