Guwahati: Indian households’ perception of current inflation has moderated since July and consumer confidence is in recovery mode, indicates a clutch of bi-monthly surveys by Reserve Bank of India released yesterday.

The “Households’ Inflation Expectations Survey” and “Consumer Confidence Survey” are based on data collected from over 6000 respondents across 19 Indian cities including Guwahati. It provides directional information, providing indications on how things will unfold over the next three months and after a year.

“Households’ perception of current inflation moderated by 50 basis points (bps) since July 2023 round of the survey to 8.4 per cent in September 2023,” says the survey that was conducted during September 2-11.
In fact, there is more optimism ahead.

“Median inflation expectations of households declined by 90 bps and 40 bps for three months and one year ahead periods, respectively, to reach 9.1 per cent and 9.9 per cent; inflation expectations have reverted to single-digits for the first time since the onset of the Covid-19 pandemic,” says the survey.

It’s even better for Northeast because Guwahati seems to be more optimistic than many other surveyed cities. Guwahati’s expectations of median inflation three months hence is less than 8%, shows the survey, lower than most other cities.

Inflation expectations are the rate at which people, in this case households, expect prices to rise in the future. “They matter because actual inflation depends, in part, on what we expect it to be,” according to a Brookings institute article.

Going by that, the Northeast could be more optimistic about its future than many other regions.

The consumer confidence survey also indicates that people are less pessimistic compared to last year. That is perhaps when the spectre of Covid-19 was still on people’s minds, according to informed sources. The 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.

“General economic outlook as well as the prospects for employment, income and spending are expected to improve further over the next one year; the future expectations index (FEI) also reached a four-year high in the latest survey round,” says the RBI survey.
“Consumer confidence for the current period reverted to its recovery path after a brief pause in July 2023 round of the survey; the current situation index (CSI)2 reached a four-year high on the back of respondents' better assessment of current general economic situation and employment conditions in September 2023.”

Households remain highly optimistic on future earnings even though their sentiment on current earnings remained around its July 2023 level, adds the survey highlights.

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