(Bloomberg) -- Indian households expect prices to cool in the coming days and the economy to improve, surveys from the central bank found.
Inflation perceptions in November dropped by 40 basis points to 9.8%, according to a Reserve Bank of India survey of 6,066 urban households in 19 major cities. Three-month and one-year ahead expectations declined by 40 and 20 basis points, respectively.
“Lowering of inflation expectations was broad based across respondent categories for both three months and one year horizons,” the RBI said in a statement on its website Wednesday. Among major products and services, more households expected higher inflation in food and housing past the one year mark.
The central bank slowed down the pace of its rate increase, but Governor Shaktikanta Das said the “battle against inflation is not over.” Consumer prices have exceeded the RBI’s target of 6% since the start of the year, though inflation is “expected to moderate,” Das said. The RBI kept its forecast unchanged at 6.7% for the financial year.
A separate survey by the RBI found that consumer confidence has recovered since the second wave of the pandemic last year, “though it remained in the pessimistic zone.” The current situation index improved “on account of better perceptions on the general economic situation, employment and household income,” the RBI said.
The future expectations index measuring the one year ahead outlook also improved, after remaining steady in the previous three surveys. The outlook on discretionary spending “moved to positive terrain for the first time since the onset of the pandemic,” the RBI said in its statement.