The Reserve Bank of India’s (RBI) bi-monthly “Households’ Inflation Expectations Survey” has found that Inflation Concerns Highest Among Elderly People.

The survey was carried out in 19 cities across India between July 1-10, covering 6,025 urban households to understand their perception of inflation.

RBI has been tightening its monetary policy since last year to control inflation. The survey data is expected to help take appropriate policy decisions.

The respondents were asked about the current inflation and their expectations for the next three months and the year ahead. Most respondents believe the current inflation is at 8.9 per cent. However, those who retired from their jobs thought inflation was 10.1 per cent.

Of the various categories of people who participated in the survey, retired people believed India’s inflation was higher than other respondents thought. The participants included financial sector employees, self-employed people, homemakers, retired people, daily workers, etc.

The latest RBI survey saw a 10 basis points increase to 8.9 per cent in the current inflation perception compared to the one conducted in May 2023.

Further, the participants were divided into different age groups with a five-year gap, starting at 25 years, 25-30 years, 30-35 years, and 60 years and above. Seniors’ expectation of inflationary pressure in the next three months is 10.8 per cent and 10.7 per cent for the year.

People aged 55 to 60 years and 40-45 years expect inflation of 10.1 per cent in the next three months. Those in the age group of 35-40 expect 10.4 per cent inflation.

Overall, inflation expectations remained high due to rising food prices. In the last six RBI surveys, respondents expected food prices to rise.

However, in the monetary policy meeting (MPC) of RBI, which ended on Thursday, Aug 10, 2023, RBI Governor Shaktikanta Das said that “vegetable price may see a significant correction after (a) few months”. Due to the surge in vegetable prices, inflation will likely increase in July and August, but “vegetable price shock may reverse quickly”. Some 63.5 per cent of the respondents expect food prices will increase more than the current rate in the next three months, and 60.6 per cent expect food prices to grow more than the current prices in a year.

MPC expects the consumer price index (CPI) inflation to be at 6.2 per cent in the second quarter of 2023 and 5.4 per cent for FY2023-24.