Households expect prices to rise faster, says RBI survey
MUMBAI: More households expect prices to rise in the next on year than three months ago, a Reserve Bank of India (RBI) survey released after the monetary policy review showed.
81% of the households surveyed by the central bank expect prices to increase, up from 68% when the last survey was done in December 2016.
The RBI surveyed 5,084 households across 18 cities including financial sector employees, housewives, self-employed and daily workers.
"A higher proportion of respondents expect the general level of prices to increase in the next three months and over one year ahead as compared with the December 2016 round across all product groups," RBI said.
Half of the respondents which expect prices to rise, think that it will rise at more than the current rate across all product groups.
Household expectations of prices form a crucial input for the central bank's inflation target. These expectations are also in line with what the upside risks RBI flagged in its monetary policy review on Thursday, mainly uncertainty of monsoon and its impact on food prices, higher house rent allowances due to seventh pay commission recommendations and on-off effect of the new goods and services tax.
81% of the households surveyed by the central bank expect prices to increase, up from 68% when the last survey was done in December 2016.
The RBI surveyed 5,084 households across 18 cities including financial sector employees, housewives, self-employed and daily workers.
"A higher proportion of respondents expect the general level of prices to increase in the next three months and over one year ahead as compared with the December 2016 round across all product groups," RBI said.
Half of the respondents which expect prices to rise, think that it will rise at more than the current rate across all product groups.
Household expectations of prices form a crucial input for the central bank's inflation target. These expectations are also in line with what the upside risks RBI flagged in its monetary policy review on Thursday, mainly uncertainty of monsoon and its impact on food prices, higher house rent allowances due to seventh pay commission recommendations and on-off effect of the new goods and services tax.
