Business inflation expectations ease to 4.84 pc in August: Survey
New Delhi, Oct 1 (TNT): Business inflation expectations in India marginally declined to 4.84 per cent for the one-year-ahead period in August 2026, from 4.94 per cent in July, according to the Business Inflation Expectations Survey (BIES).
Business inflation expectations remained below 5 per cent for the third consecutive month. However, uncertainty surrounding these expectations remained elevated at over 2 per cent for the eighth consecutive month, the survey showed.
Businesses projected headline Consumer Price Index (CPI) inflation at 4.63 per cent for the one-year-ahead period in August, marginally higher than the 4.56 per cent reported in June, an increase of seven basis points.
Uncertainty surrounding CPI inflation expectations remained above 1 per cent between February and August 2026.
Firms’ perceptions of current costs presented a mixed picture. The share of businesses reporting a significant increase in costs, in the range of 6 to 10 per cent, rose to 25 per cent in August from 23 per cent in the previous round.
However, the proportion reporting a very significant increase of more than 10 per cent declined to 16 per cent from 21 per cent.
The share of firms reporting moderate cost increases, ranging from 3.1 to 6 per cent, also fell to 22 per cent from 26 per cent in the previous round.
Meanwhile, business sales expectations improved for the third consecutive month in August. More than 53 per cent of firms reported sales at normal levels or higher, compared with 50 per cent in July.
Profit margin expectations also showed improvement over the three-month period. The share of firms reporting profit margins as somewhat below normal or lower declined to 68 per cent in August from 78 per cent in May.
The survey assessed businesses’ perceptions of current sales, profit margins and unit costs, along with their expectations of cost movements over the next 12 months.
Respondents were also asked to project one-year-ahead CPI headline inflation using probability distributions in a question conducted every alternate month to coincide with the Reserve Bank of India’s bi-monthly monetary policy announcements.
TNT TS
