APN News

  • Saturday, December, 2023| Today's Market | Current Time: 07:12:16
  • Households expect inflation at 13% by March: RBI survey

    Published on June 12, 2011

    While the Reserve Bank expects inflationary pressure to moderate by the second half of this fiscal and the rate of price rise to fall to 6 per cent by March 2012, households across the country believe that it will infact go up to almost 13 per cent.

    In RBI’s ‘Inflation Expectations Survey of Households: March 2011′, Urban households have said inflation is likely to touch a high of 12.7 per cent within a year.

    “Households expect inflation to rise further by 40 and 120 basis points during next quarter (11.9 per cent) and next year (12.7 per cent), respectively, from the perceived current rate of 11.5 per cent,” it said.

    The survey, conducted from January-March, covered 4,000 households in 12 cities.

    This was the 23rd round of the quarterly survey to gauge inflation expectations from urban households.

    As per the findings, households’ expectations of general price rise were mainly influenced by movements in food prices.

    This is in sharp contrast to the pronouncements made by RBI at its 3rd May monetary policy review.

    RBI had said that inflationary pressure in the next few months would come mainly from high international commodity prices, particularly of crude, while food prices will stabilise.

    The overall inflation has been above 8 per cent since January 2010 and was 8.66 per cent in April this year.

    RBI had said that high global commodity prices would ensure that headline inflation remains at an average of 9 per cent during the first half of this fiscal, before going down to around 6 per cent by March 2012.

    However, after a temporary trend of moderation, food inflation again went above 9 per cent during the last week of May, thus upsetting the Government’s and RBI’s calculations.

    The RBI has already said that high inflation would eat into the growth this fiscal.

    It has projected the economy to grow by 8 per cent in 2011-12, as against a 9 per cent projection made by the Government in its pre-Budget survey.

    The latest households survey by RBI found that besides food items, respondents also expect price rise in other segments such as non-food, durables, housing and services.

    “Daily-wage workers and housewives expected higher inflation rates compared to other categories,” it said.

    While daily workers expect inflation to average 13.1 per cent a year later from the date of data collection, housewives expect it to be 12.8 per cent.

    Retired persons and self-employed people covered by the survey expect inflation to be 12.7 per cent, while financial sector employees put it at 11.9 per cent.


    Leave a Reply