MUMBAI:
Lifestyle inflation
- where consumers move to higher end products - has outstripped
price rise
in
essential commodities
every year since FY18. While lifestyle inflation is a reflection of
demand
that is usually targeted by
policy rates
, price increase of essential commodities is more of a supply driven phenomenon, which needs targeted govt intervention.
According to a report by Bank of Baroda's economics department, from FY18 onwards, there has been an uptick in the lifestyle inflation rate. From 4% in FY18, it has inched up to 6.4% in FY23. During the same period, per capita gross national disposable income had a CAGR of 8.5%.
Compared to FY18, lifestyle items like glassware within utensils saw a rise from 2.8% to 6%, candles increased from 3.1% to 7.1%, and monthly maintenance charges surged from 2.2% to 10.9%. Similarly, motor vehicles rose from 2.4% to 7.7%. Electronic items saw jumps as well, with mobile handsets increasing from 0.3% to 5.9%, and PC/laptop from 1.6% to 9.1%. Clocks/watches rose from 4.9% to 7.9%, while travel goods increased from 1.1% to 3.8%. These shifts reflect growing affordability and aspirations for improved living standards, the report said.
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