RBI survey: Mumbai residents most affected by inflation

Actual retail inflation was a lower-than-expected 5 per cent in June, data from the Central Statistics Office showed. At the all-India level, too, the average urban resident felt that inflation in June was 8.1 per cent.

Written by Khushboo Narayan | Mumbai | Published: August 4, 2018 4:09:47 am
Understanding inflation Inflation. (Illustration)

Mumbai residents have been the most affected by inflation, shows the June round of inflation expectations survey conducted by the Reserve Bank of India (RBI). The round surveyed 5,189 urban households across 18 cities and many occupational categories.

According to the survey, an average Mumbai resident thought the inflation rate in June was 10.8 per cent, the highest among the 18 cities surveyed. Actual retail inflation was a lower-than-expected 5 per cent in June, data from the Central Statistics Office showed. At the all-India level, too, the average urban resident felt that inflation in June was 8.1 per cent. The cities that did not feel the pinch as much were Bengaluru, at 5.2 per cent, and Bhopal, at 5.8 per cent. But even there, the perceived inflation was higher than the actual. Things are going to get worse, feels the average urban resident.

Mumbai residents expect the inflation in September to rise to as much as 12.2 per cent, much more than the central bank’s second fiscal quarter inflation forecast of 4.6 per cent. Ahmedabad and Kolkata residents expect September inflation to be as high as 10.7 per cent, second only to Mumbai. Bengaluru residents had a more optimistic three-months ahead inflation projection at 5.9 per cent.

Mumbai residents expect inflation a year ahead (June 2019) to touch 12.5 per cent. Hyderabad residents also projected the same number. The most optimistic were Raipur residents at 5.4 per cent. At an all-India level, the number was 10.1 per cent, an increase from the 9.9 per cent seen in the May survey.

The RBI’s monetary policy, which hiked rates by 25 basis points for the second time in three months, noted inflation expectations of households as one of the key factors.

Other factors included the already high and rising crude oil prices, volatility in the global financial markets, input price pressures, the vagaries of the monsoon, and fears of a fiscal slippage, if the government distributes sops ahead of the 2019 elections.