Households Expect Inflation To Edge Up Further, Shows RBI Survey

Households’ median perception of current inflation rose by 30 basis points to 8.4% in November, as compared to the previous survey round in September, showed the findings of the RBI's Households’ Inflation Expectations Survey.

Median inflation expectation for three months horizon moderated marginally by 10 bps to 9.1%, whereas it inched up by 10 bps to 10.1% for the one-year ahead period.

The share of households anticipating higher inflation for the three months ahead was a shade lower vis-à-vis the previous survey round due to anticipation of lower pressures from non-food items and cost of services.

Compared to September 2024 round of the survey, a larger share of respondents expected the year-ahead price and inflation to increase, mainly due to higher pressures from food items and housing related expenses.

Consumer confidence for the current period declined marginally owing to weaker sentiments across the survey parameters except household spending, according to the Consumer Confidence Survey by the RBI. The current situation index moderated by 0.7 points to 94 in November 2024.

Households displayed somewhat higher optimism on one year ahead outlook for major economic parameters, except prices. The future expectations index improved by 0.5 points to 121.9 in the survey.

Even as the respondents’ sentiments towards current earnings moderated marginally, they displayed high optimism on future income which was consistent with their expectation on employment conditions.

Households also anticipated higher spending over one year horizon on the back of higher essential as well as non-essential spending.