 "The analysts also say that weak domestic remittances (due to reverse migration) and weak perishables output (in the past few months) do not leave rural households to spend much on FMCG and other products")
Households expect some rise in price and inflationary pressures across major product groups for the year ahead, according to the Reserve Bank of India’s (RBI’s) forward looking surveys.
Consumers retained negative sentiments on both the current and future price conditions. Expectations regarding overall prices and inflation over the next three months were more aligned with those of food products and services.
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As for the year ahead, such alignment is more pronounced with the prospects for food products and housing segments.
The RBI released results of its bi-monthly inflation expectations survey of households, which was conducted during November 2-11, in 19 major cities. It saw responses from 6,036 urban households. Female respondents accounted for 50.1 per cent of this sample.
RBI, in its monetary policy review for December 2023, projected retail inflation — consumer price index (CPI) inflation — to be at 5.4 per cent for the current financial year (FY24). Assuming normal monsoon next year (FY25), CPI is expected at 5.2 per cent for Q1; 4 per cent in Q2; and at 4.7 per cent in Q3. The risks are evenly balanced.
The RBI also released results of a consumer confidence survey conducted in November. Respondents remained fairly optimistic on the one-year ahead prospects for general economic situation, employment, income and spending.
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The confidence on general economic and employment conditions were, however, a shade lower compared to the previous survey round, which led to a moderation of the future expectations index (FEI).
Consumer confidence for the current period remained stable. The current situation index (CSI) remained unchanged at 92.2 from the previous round as higher pessimism on the general economic situation and employment was counterbalanced by a positive turnaround in sentiment on current income, RBI survey showed.
The bi-monthly survey collects current perceptions (vis-à-vis a year ago) and one year ahead expectations of households on general economic situation, employment scenario, overall price situation and own income and spending across 19 major cities.
The latest round of the consumer confidence survey was also conducted during November 2-11, 2023, covering 6,082 respondents. Female respondents accounted for 52.8 per cent of this sample.
