Inflation in India seen touching 12.7 per cent next year

The annual rate of inflation in the country is expected to rise further by 40 basis points during the next quarter to around 11.9 per cent and by 120 basis points to around 12.7 per cent by the next year, from the perceived current rate of 11.5 per cent, a survey of households by the Reserve Bank of India (RBI) showed.

Households' expectations of general price rise were mainly influenced by movements in food prices. Daily-wage workers and housewives expected higher inflation rates compared to other categories.

The percentage of respondents expecting price rise for all product groups (namely, general prices, food products, non-food, household durables, housing and services), were, however, lower.
 
Across cities, Bangalore recorded the highest inflation Expectation. The survey results also signalled a moderation of business activity in the manufacturing sector during the January-March quarter as well as April-June quarter, RBI said.

The 23rd survey of households conducted in January-March 2011 captures the inflation expectations of 4,000 urban households across 12 cities.

The survey represents the inflation expectations of 4,000 urban households based on their individual consumption baskets.

Manufacturing declines