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Indian Companies' Inflation Expectations Ease, According to IIM-A Business Inflation Expectations Survey

Indian Companies' Inflation Expectations Ease, According to IIM-A Business Inflation Expectations Survey

 The Indian Institute of Management-Ahmedabad (IIM-A) has released the latest Business Inflation Expectations Survey (BIES), which reveals that one-year ahead inflation expectations of Indian companies decreased by 13 basis points to 4.40 percent in March from 4.53 percent in February. This comes after inflation expectations hit a five-month high of 4.79 percent in January. Policymakers closely monitor inflation expectations as they play a crucial role in ensuring price stability. The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) emphasized the importance of anchoring inflation expectations during its April 6 meeting, where it surprised the markets by keeping the repo rate unchanged at 6.5 percent. The MPC stated that "it is essential to rein in the generalization of price pressures and anchor inflation expectations."

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