MC-Deloitte CEO Survey: 35.6% moderately confident of inflation easing to 4%

RBI Governor Sanjay Malhotra

Indian industry is only moderately confident of the Reserve Bank of India’s ability to contain inflation to the target of 4 percent, a Moneycontrol-Deloitte Survey of 45 chief executive officers (CEOs) has found.

According to the survey, 35.6 percent are moderately confident, while a larger 37.8 percent are neutral on the central bank bringing inflation down to 4 percent.

The exclusive Moneycontrol-Deloitte CEO survey was conducted between January 10 and January 22 across financial services, consumer goods, technology, and energy sectors.

A relatively smaller 20 percent and 4.4 percent of CEOs surveyed fell in the "not so confident" and "highly confident" brackets.

On December 6, the RBI revised its inflation forecast for FY25 to 4.8 percent, up from the 4.5 percent projection in the October meeting.

The central bank also revised its consumer price index (CPI) inflation estimate for Q3 to 5.7 percent from the previous forecast of 4.8 percent. For Q4, the estimate was updated to 4.5 percent, higher than the earlier one of 4.2 percent.

CPI inflation projection for Q1FY26 was also revised higher to 4.6 percent.

According to the latest available data, retail inflation remained above the RBI's target even as it declined to a four-month low of 5.22 percent in December from 5.48 percent in the previous month.

The RBI targets an inflation rate of 4 percent, with 6 percent and 2 percent as the upper and lower tolerance bands.

Steep inflation has been one of the reasons behind the Reserve Bank maintaining a status quo on the benchmark policy rate. In its December meeting, the RBI held the policy rate at 6.5 percent for the eleventh consecutive time, as elevated food prices continued to keep inflation above the RBI's target.

The RBI expects food inflation to moderate in the fourth quarter, supported by a drop in vegetable prices and arrival of kharif crops.