'Experiences' push is driving recreation services inflation

Experiences are driving service inflation

Fans splurging to buy tickets for Coldplay concerts, Diljit Dosanjh tours, comedy gigs, is driving inflation in recreational services, according to experts.

As people spend more on "experiences", such as concerts inflation in recreational services is picking up. Low base from the previous year is also contributing to higher inflation.

Recreational services includes spending on events other than movie theatres and sports coaching.

Data indicates that recreation service inflation, at 13.8 percent, reached its highest level in four years in December. Recreation inflation was 13.6 percent in November.

“People are spending more on experiences which could have translated into higher inflation,” said Gaura Sengupta, chief economist, IDFC First Bank.

Inflation in the category averaged 5 percent between April and October 2024.

"As far as recreation goods and hobbies are concerned, high inflation could be attributed to higher demand from the top income bracket," said Paras Jasrai, senior analyst, India Ratings and Research.

India’s retail inflation eased to a four-month low of 5.2 percent in December from 5.5 percent in the previous month.

While a decline in food prices contributed to the fall, Moneycontrol analysis shows that services inflation also declined to a three-month low of 3.45 percent from 3.5 percent in November.

Excluding housing, the decline was less pronounced at 3.97 percent in December than 4.01 percent the previous month.

While inflation in the recreation and amusement category, which includes television, PC, laptop, newspapers and sports goods, has been muted below 3 percent, it reached a nine-month high of 2.7 percent in December.

Maintenance gets costly 

Monthly maintenance charges paid by households have also risen owing to a low base. In December, the inflation in the category reached a 49-month high of 14 percent rising from 13.1 percent in the previous month.