Consumer confidence, inflation expectations surge in March, finds RBI survey

Also read: Das finally picks inflation over growth, how soon will MPC hike rates?

The Consumer Confidence Survey was conducted in 19 major cities during the March 2-11 period and covered 5,984 households.

While consumer confidence improved, inflation expectations edged up, though only marginally.

Also read: RBI Policy: With a strong external sector, India fit to withstand war and volatility headwinds

As per the RBI's Households' Inflation Expectations Survey, median inflation perceptions for the current period were unchanged at 9.7 percent in March.

Inflation expectations, however, for the three-month and one-year ahead periods rose by 10 basis points each to 10.7 percent and 10.8 percent.

"Three months ahead expectations for overall prices and inflation were generally aligned to those for food and non-food products, while one year ahead expectations were more aligned to those for non-food products and services," the RBI said.

The inflation expectations survey provides directional information on near-term inflationary pressures. The RBI does not treat them as households' sentiments on inflation.

Like the Consumer Confidence Survey, the Households' Inflation Expectations Survey was conducted in 19 major cities during March 2-11 with a slightly larger sample size of 6,033 households.

In its monetary policy review on April 8, the RBI raised its forecast for inflation in 2022-23 to 5.7 percent from 4.5 percent and downgraded GDP estimate to 7.2 percent from 7.8 percent even as it left key interest rates unchanged.

Speaking to media, RBI governor Shaktikanta Das said inflation was now the first priority. “We have now put inflation before growth in the sequence of priorities,” said Das.