Indian households see inflation accelerating in next few months

Indian households expect inflation to accelerate through the next three months to one year driven mainly by food and housing, according to a survey by the country’s central bank.

Households believe inflation in India may rise by 20 basis points for three months and by 10 basis points over a year, according to one of the surveys released by the Reserve Bank of India on its website Friday. “Higher share of respondents expected prices and inflation to rise for all major product groups,” the central bank’s statement said.

Researchers gauge the direction, rather than the absolute level of inflation, through these surveys.

The survey results reflect the central bank’s view that while inflation is moderating, prices can flare up for many reasons and it can be tricky to achieve the last mile of disinflation.

“On inflation, we are on the right track, but there is still work to be done,” RBI Governor Shaktikanta Das said announcing monetary policy earlier in the day. The RBI kept its policy rate unchanged for eight straight reviews as inflation remained above its target 4 per cent.

The RBI conducted the survey between May 2-11 in 19 major cities. It got responses from 5,943 households, over half of which were females. Among the group, self-employed respondents expected the highest inflation, according to RBI.

Meanwhile, another survey by the central bank found that consumer confidence for the current period declined marginally due to “tempered sentiments” on India’s economic situation and employment prospects. More respondents expected an increase in both essential and non-essential spending, the survey said.