Consumer price inflation for November fell to a 17-month low of 2.33 per cent, but for Mumbai residents it felt like 10.3 per cent, the highest in the country, according to the Reserve Bank of India’s inflation expectations survey. Delhi denizens also felt that November inflation was something like 10.3 per cent, the survey showed. These are the median responses from each city. A total of 5,802 urban households covering various occupational categories were covered in the survey.
Overall, for India as a whole, inflation expectations remained sticky. Households on average thought November retail inflation was 8.2 per cent compared to 8.4 per cent in the September survey. All the cities surveyed had a higher perception of current inflation than the actual. Bengaluru at 5.5 per cent and Thiruvananthapu-ram at 5.4 per cent were the closest to the actual figures.
Mumbai residents retain this pessimism for there month-ahead inflation as well. They expect inflation in February to increase to 10.5 per cent as do Delhi (10.5 per cent) and Ahmedabad (10.7 per cent) households. This way higher than the central bank monetary policy committee’s projections of 2.7-3.2 per cent inflation in the second half of the current fiscal year.
Similarly, Mumbai residents think that inflation a year ahead, i.e. in November 2019, will be around 10.7 per cent, again the highest among all cities surveyed. Lucknow (10.6 per cent), Ahmedabad (10.5 per cent), Delhi (10.4 per cent) and Nagpur (10.1 per cent) are also cities where households expect year-ahead inflation to top 10 per cent. In contrast, the Reserve Bank of India expects inflation to average between 3.8 and 4.3 per cent in the first half of the next fiscal year.