 "US inflation")
Perhaps showing the effect of monetary policy actions, households' perception of current inflation moderated by 50 basis points (bps) since the July 2023 round of the survey to 8.4 per cent in September 2023.
The Reserve Bank of India's bi-monthly Inflation Expectations Survey of Households (IESH) showed that inflation expectations of households declined by 90 bps for three months to reach 9.1 per cent. They declined by 40 bps for one year ahead to reach 9.9 per cent.
The results of the September 2023 round of its bi-monthly survey were released alongside the monetary policy review. The survey was conducted during September 2-11, 2023, in 19 major cities, with responses from 6,066 urban households. Female respondents accounted for 50.4 per cent of this sample.
The inflation expectations have reverted to single digits for the first time since the onset of the Covid-19 pandemic, and households expect lower price and inflationary pressures for most of the product groups, the RBI said.
The RBI also conducted a Consumer Confidence Survey. It showed that consumer confidence for the current period reverted to its recovery path after a brief pause in the July 2023 round of the survey.
The Current Situation Index (CSI) reached a four-year high on the back of respondents' better assessment of the current general economic situation and employment conditions in September 2023.
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The general economic outlook, as well as the prospects for employment, income, and spending, are expected to improve further over the next one year.
Households remain highly optimistic on future earnings, even though their sentiment on current earnings remained around its July 2023 level. The respondents were less pessimistic on prevailing price levels and inflation when compared to a year ago.
Though price expectations for the year ahead remain negative, respondents' pessimism on this front has moderated in the latest survey round, it added.
