Residents of Mumbai are feeling the pinch of rising prices the most among all Indians, shows the September round of inflation expectations survey conducted by the Reserve Bank of India. It surveyed 5,760 urban households across 18 different cities and various occupational categories.
According to the survey, the average Mumbai resident thought the inflation rate in September was 12.1 per cent, the highest among the 18 cities surveyed. The consumer price index (CPI) inflation data for September is yet to be released. But actual retail inflation is unlikely to be above 5 per cent, according to estimates of economists. At the all-India level too, the average urban resident felt that inflation in September was 8.4 per cent compared to 8.1 per cent in the June survey.
The cities that didn’t feel the inflation bite so much were Bengaluru at 4.7 per cent and Raipur at 5.8 per cent. But even in these cities, perceived inflation is higher than the upper bound of what actual inflation is likely to be.
While the RBI’s monetary policy panel stayed its hand on hiking rates Friday, things are going to get worse, urban residents feel.
Mumbai residents expect inflation in December to rise to 13.5 per cent. That is a lot higher than the RBI’s forecast of 3.9-4.5 per cent in the second half of this fiscal. Ahmedabad and Kolkata residents were also pessimistic. The latter expect December inflation to touch 11 per cent, second only to Mumbai. On the other hand, Bengaluru residents project three-months ahead inflation at 5.4 per cent, the lowest among all cities.
Mumbai residents are the most pessimistic in expectations of inflation a year ahead (September 2019) at 12.2 per cent. This, when the average urban resident expects inflation one-year ahead to moderate to 9.8 per cent compared to 10.1 per cent in the last survey. Kolkata and Hyderabad follow Mumbai with forecasts of 11.9 per cent and 11.5 per cent respectively. The most optimistic were Bengaluru and Raipur residents at 6.1 per cent.