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Indian households expect inflation to reach 10 per cent over the next one year, up from 9.4 per cent in July, reflecting growing concerns over rising prices at a time when the Reserve Bank of India (RBI) has begun raising interest rates to contain inflation.
According to the RBI's September 2026 Inflation Expectations Survey of Households, the median inflation expectation for the next 12 months increased by 60 basis points to 10 per cent, while the three-month expectation rose by 70 basis points to 9.9 per cent from 9.2 per cent in July. The RBI said, "Households median inflation expectations for the next three months and one year rose by 70 bps and 60 bps to 9.9 per cent and 10.0 per cent, respectively." The findings come as the RBI's Monetary Policy Committee raised the repo rate by 25 basis points to 5.50 per cent on October 7 amid inflation concerns. Rising household inflation expectations are significant because they reflect growing concerns about future living costs and can influence consumer spending and wage expectations, making them an important indicator for monetary policy. The survey also showed that households' perception of current inflation increased to 8.4 per cent in September from 7.8 per cent in July. "The current median inflation perception of households increased by 60 basis points (bps) to 8.4 per cent as compared to the previous round," RBI said. Concerns about future price increases also strengthened. As many as 88.9 per cent of respondents expected general prices to rise over the next year, while 67.4 per cent anticipated prices increasing at a faster pace than currently. Over the next three months, 81.9 per cent expected prices to increase, compared with 80.7 per cent in July. Food prices remained a major concern, with 84.9 per cent expecting food prices to rise over the next three months. Of these surveyed households, 61.6 per cent of all respondents expected food prices to increase faster than at present. The RBI noted that "The proportion of respondents anticipating a rise in general inflation has inched up for both the time horizons." The survey highlights persistent inflation concerns among households even as monetary policy has turned tighter. However, the 10 per cent figure represents households' median expectation and should not be interpreted as the RBI's official inflation forecast. The survey was conducted between September 10 and 20 across 19 major cities, covering 5,987 respondents. (ANI)
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