New Delhi, Mar 6 (KNN) Corporate India's inflation expectations appear to be stabilising around 4.3 per cent, according to the latest findings from the Business Inflation Expectations Survey (BIES) conducted by the Indian Institute of Management-Ahmedabad (IIM-A).

The survey, released on Tuesday, revealed a decline in inflation expectations to 4.37 per cent in January, indicating a 21 basis point drop from December 2023.

The one-year-ahead outlook for inflation among India Inc has also decreased, dropping to 4.3 per cent from 4.58 percent in December 2023, as reported by the survey.

Professor Abhiman Das, who oversees the survey, highlighted that the average inflation expectation for the past six months stands at approximately 4.3 per cent, with many firms anticipating a moderation in cost pressures.

Primarily consisting of manufacturing firms, respondents to the BIES contribute to the insights provided by the survey, which is now in its 81st iteration and based on responses predominantly collected in the latter half of February.

Inflation expectations hold significant importance for policymakers, as they play a crucial role in ensuring price stability.

The Reserve Bank of India's Monetary Policy Committee (MPC) emphasised on February 8 the necessity for monetary policy to remain "actively disinflationary" to anchor inflation expectations effectively.

According to the IIM-A survey, the proportion of businesses reporting a 6 per cent or more increase in costs in January slightly decreased to 31 per cent from 33 percent in December.

Additionally, 25 per cent of firms experienced cost increases ranging from 3.1 to 6.0 per cent, down from 29 per cent in December.

(KNN Bureau)