Mumbaikars’ perception of current inflation is the highest barring Guwahati residents, shows the August round of inflation expectations survey conducted by the Reserve Bank of India (RBI). The August round surveyed 4,737 households in 18 cities across India.
According to the survey, Mumbai residents thought the inflation rate in June was 8.5 per cent, lower than just Guwahati’s 10.6 per cent. These are the median numbers for each city. Actual retail inflation in June was 1.54 per cent, the lowest since the current consumer price inflation index debuted in 2011-12, prompting the RBI to cut the policy rate by 25 basis points to 6 per cent in its monetary policy review Wednesday. Ranchi’s perceived inflation of 3.4 per cent was the closest to the actual.
Still, Mumbai citizens were a bit more optimistic when it came to three-month ahead and one-year ahead inflation expectations. They expect inflation to rise to 8.6 per cent by September-end, well ahead of the central bank’s April-September inflation forecast of 2-3.5 per cent. Guwahati’s three-month ahead expectations was the highest at 10.1 per cent.
Ranchi residents were the most optimistic at 4 per cent expectation followed by Bengaluru at 5.4 per cent. One-year expectations were the highest for Thiruvananthapuram citizens, who expect inflation to scale 12.3 per cent followed by Kolkata at 10.9 per cent. Mumbai residents project this at 9.5 per cent. The most optimistic were Ranchi residents at 5.5 per cent.
In its latest policy review, the RBI’s monetary policy committee reiterated its commitment to a medium-term inflation target of 4 per cent.