Expectation of inflation declines, says RBI Survey

Expectation of price rise over the current level in the coming quarter has decreased, said an RBI survey.
"In terms of qualitative response, the proportion of respondents expecting price rise by more than current rate in respect of general price level as well as prices of all product groups (except housing prices for three-month ahead period), has decreased as compared with the previous round of survey for both three-month ahead period and one-year ahead period," it said.
In terms of quantitative responses, inflation perception and expectations of households moderated in current round as compared to December 2015 round, it added.

The survey showed that daily workers, unemployed and students, and housewives have comparatively higher inflation expectations for three-month ahead period based on median inflation rates.
Respondents from Guwahati, Ahmedabad, Kolkata, Jaipur and Thiruvananthapuram expect relatively higher inflation for next three months, it said.
As per the results of the Survey of Professional Forecasters on Macroeconomic Indicators, Gross Value Added at basic price (GVA) is expected to increase by 7.7 per cent, higher than the projection of RBI's projection of 7.6 per cent for the current fiscal.

"It would be led by growth in Services by 9.1 per cent. Agriculture & Allied Activities and Industry are expected to grow by 2.6 per cent and 7.4 per cent, respectively," the Survey said.

As per the Industrial Outlook Survey the outlook on business sentiments shows moderate optimism for first quarter of the current fiscal.
"The Business Expectation Index (BEI) dipped from 114.2 (for Q4:2015-16) to 110.9 (for Q1:2016-17)," it said.
Moderation in the business sentiments is seen in all business indicators barring pending orders, salary and overall financial situation, it said.
At the same time, Consumer Confidence Survey indicated improvement in the general economic situation, as measured by net response, both for the current and a-year ahead period.
"Moreover, the proportion of respondents reporting improvement in current and future economic conditions, which had shown decline in September 2015, continued to increase for the second quarter in succession," it said.