HOUSEHOLD PERCEPTION
Households expect inflation to rise over 3 month & one year horizon
Households in India expect inflation to decrease in the short term but anticipate a slight increase over the next three months to a year, according to a survey by the Reserve Bank of India. Inflation expectations for the coming months rose slightly, with more respondents predicting price increases across various product categories. The central bank projects CPI inflation for 2024-25 at 4.5%, with risks balanced and slightly higher projections for subsequent quarters.
Household income, employment outlook returns to pre-pandemic levels
The study also reveals that overall spending is primarily driven by essential expenditures, which are mostly price inelastic, while non-essential spending shows less alignment with price levels. The higher income groups displayed more optimism post-pandemic.
Households expect inflation to moderate further
Households’ inflation expectations for both three months and one year ahead moderated by 20 basis points (bps, one bps is 0.01 percent) each to 9 percent and 9.8 percent, respectively. Their perception on current inflation, however, remained unchanged at 8.1 per cent.
Mixed outlook on household inflation expectations
Household inflation expectations, as per the Reserve Bank's survey, depict a mixed scenario. While current perception declined slightly, expectations for the near term increased. The central bank's caution regarding future inflation, particularly concerning food prices, aligns with household assessments. Adverse weather conditions and geopolitical tensions contribute to uncertainty. Majority foresee higher inflation in the short term, especially in food products. Demographically, the self-employed and men express greater concern about inflation. The survey, conducted bi-monthly, offers insights into near-term inflationary pressures, reflecting respondents' consumption patterns.
Households expect inflation at double digit levels over a one year horizon
Median inflation expectation increased for one year horizon by 20 bps (one basis point is 0.01 percent) to 10.1 per cent in November 2023. “ Households expect some rise in price and inflationary pressures across major product groups for the year ahead ” said the findings of the central bank’s inflation expectation survey.
Content creators replenishing household supplies in fancy containers is gaining eyeballs in India
Restocking videos, a popular genre on social media platforms, have gained traction in India in recent years. These videos showcase content creators replenishing and organizing household supplies in aesthetically pleasing ways. The trend has been fueled by the pandemic-led push for work-from-home arrangements and a growing interest in home organization products.
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Japan's Aug wholesale inflation slows as cost pressures ease
The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 3.2% in August from a year earlier, matching a median market forecast.
RBI seems to have managed household expectations well
The Reserve Bank of India's bi-monthly inflation expectations survey showed a moderation in inflation over both three- and 12-month horizons, raising expectations inflation has peaked, despite rising food prices. RBI repo rate has remained unchanged at 6.5% for three consecutive policies with consumer price inflation on target, but economists continue to warn that the impact of El Nino on crops and the recent strengthening of global commodity prices like crude oil, may push inflation up.
Indian households bracing for higher prices: RBI survey
Inflation expectations of Indian households rose by 10 bps for three months ahead, whereas their one year ahead expectations remained unchanged at 10.8 percent from the November 2022 round of the central bank's survey.
Indian households' inflation expectations moderating: RBI's January survey
India's annual retail inflation rate eased to 5.72% in December from 5.88% in the previous month, falling below the RBI's upper tolerance band of 2%-6% for a second straight month, though core inflation, which excludes more volatile food and fuel prices, was still running at 6.1%.
Household wealth optimism collapses, global survey shows
The Edelman Trust Barometer, which for over two decades has polled the attitudes of thousands of people, found that economic pessimism was at its highest in some of the world's top economies such as the United States, Britain, Germany and Japan.
Households still expect inflation to be in double-digit over a one-year time horizon
Most categories of respondents expect higher inflation for both three months and one year ahead periods. A larger share of households expects higher prices for all product groups as compared to the previous round of the survey.
Households expect moderation in inflation
Households’ median inflation perception for the current period- July'22 moderated by 80 basis points (bps- one bps is 0.01 per cent) to 9.3 per cent in the RBI's latest survey round. Significantly, inflation expectation dipped both sequentially as well as year-on-year basis.
RBI’s January 2022 survey shows moderation in household inflation expectations
The central bank, which on Thursday, released the results of its January 2022 round of Inflation Expectations Survey of Households, said that median inflation perceptions for the current period moderated by 70 basis points to 9.7 per cent in the previous month
Household inflation expectations sequentially down, but still high: RBI survey
"Households’ median inflation perceptions for the current period moderated by 70 basis points to 9.7 per cent in January, while the three months and one year ahead median inflation expectations also declined by 170 and 190 basis points, respectively, from the November 2021 round of the survey," RBI said in the survey.
Pandemic severely impacted consumer confidence, but government measures may help
An analysis of RBI's consumer confidence surveys done by RBI researchers reveals that the consumers’ perception about the prevailing situation is severely impacted by the pandemic, while the expectations about the future have been relatively optimistic, despite being dented in successive rounds.
Food prices matter the most to households inflation expectation: RBI economists
A sudden price shock in any item may result in it having a disproportionate influence on households’ inflation perception and future expectations.
View: When it comes to inflation, don't ignore perceptions & expectations
A day after the Fed's announcement, the Bank of England raised its benchmark rate to check inflation in Britain. While Boris Johnson's current political problems with his party are unrelated, inflation at a decade's high cannot be good for his premiership.
Indian households expect inflation to be in double digits even one year ahead: RBI survey
Households’ median inflation perceptions for the current period increased by 20 basis points, reaching 10.4 per cent in November 2021, while three months and one year ahead median inflation expectations increased by 150 and 170 basis points, respectively to 12.3 per cent and 12.6 per cent respectively, from the previous survey round.
View: Perception of FDI flowing into Indian businesses is positive, but has political nuances
Business may be global, but politics remains anchored in the local. Increasingly, the former will have to factor in wider public perception that transcends their consumer base. The baseline being that FDI in India is welcome, but subject to constraints of popular democracy.
Household debt may have declined to 34% in Q1 FY22: SBI report
“We estimate that household debt as a percentage of GDP has declined to 34 per cent in Q1 FY22 with the commensurate rise in GDP in the first quarter, though it has increased in absolute terms,” the research report released on Wednesday showed.
Consumer sentiment fails to keep up with rising income: CMIE
CMIE data shows the index of consumer sentiments stood at 55.1 in February, half the pre-lockdown levels. Consumer sentiment index stood at 105.3 in February 2020, which was just a month before the lockdown.
Household inflation expectations above official numbers under inflation targeting regime: Report
CPI inflation consistently remained above the upper band of the target between above April and November caused largely by supply side constraints created by the pandemic induced nation-wide lockdown.
Consumer sentiment worsened in the week after Budget: CMIE
“A full week after the presentation of the Union Budget, the Index of Consumer Sentiments fell 4.2% in contrast to a 9% increase in equity market valuations response to the budget on the bourses,” CMIE said in its weekly analysis. “Households were not very impressed with the budget. On the contrary, they have expressed their displeasure with it,”it said. The findings are based on the Consumer Pyramids Household Survey by CMIE.
Economic recovery in India driven by Indian households and not by govt spending: CMIE
“The Indian economy has been recovering from the Covid-19-induced lockdown better than most expectations. It was clearly not driven by any government spending or initiative to spur growth. Neither was it driven by any increased investments by the private sector,” CMIE said in its weekly analysis.
Lockdown breaking stereotypes: More men take responsibility in doing household chores
Men are making a foray into the kitchen at home, and trying their hands at cooking.
Indian households shun downmarket palm oil, cutting demand in lockdown
Edible oil consumption in India trebled over the past two decades as the population rose
Over 50% affluent household 'profoundly impacted' by Covid-19
The impact of the Covid-19 pandemic and the collateral damage, current and anticipated, have had a significant impact on the affluent consumer households, an Access Media International study said.
Due to coronavirus pandemic, perception of importance of insurance now higher than ever: Survey
Covid-19 has accelerated insurance awareness in India. The findings of this Policybazaar survey show that unlike in the past, insurance has now become a product that consumers are likely to buy without the need for a big sales push.
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