The Inflation Expectations Survey of Households for the January-March 2014 quarter (35th round) captures the inflation expectations of 4,926 urban households across 16 cities, for the next three-month and the next one-year period. These expectations are based on their individual consumption baskets and hence these rates should not be considered as predictors of any official measure of inflation. The households’ inflation expectations provide useful directional information on near-term inflationary pressures and also supplement other economic indicators to get a better indication of future inflation.
Highlights:
-
The proportion of respondents expecting ‘general’ price rise, as also for all product groups, by ‘more than current rate’ decreased for three-month ahead as well as one-year ahead period (except for ‘food products’ for three-month ahead period).
-
In terms of quantitative response, three-month ahead and one-year ahead median inflation expectations of households decreased in March 2014 round as compared to the previous round.
-
Households expect median inflation to rise further by 200 basis points during next one-year from the perceived current rate of 13.3 per cent. However, for next three-month, the same has declined by 40 basis points.
-
Survey shows that daily workers and retired persons have marginally higher level of inflation expectations based on median inflation rate. No visible pattern emerged from age-wise profile of respondents.
- About 75 per cent (70 per cent in the last round) and 77 per cent (80 per cent in the last round) of respondents expect double digit inflation rates for three-month ahead and one-year ahead period, respectively.
Table 1: Respondents’ Profile (Category): Share in Total Sample |
Category of Respondents |
Share in Total (%) |
Target Share (%) |
Financial Sector Employees |
9.9 |
10.0 |
Other Employees |
15.6 |
15.0 |
Self-employed |
19.9 |
20.0 |
Housewives |
30.3 |
30.0 |
Retired Persons |
9.3 |
10.0 |
Daily Workers |
9.8 |
10.0 |
Others |
5.2 |
5.0 |
Note: The above sample proportion is for the quarter ended March 2014 survey. |
Table 2: Product-wise Expectations of Prices for Three-month ahead and One-year ahead |
(Percentage of respondents) |
Round No./survey period |
32 |
33 |
34 |
35 |
32 |
33 |
34 |
35 |
(quarter ended) → |
Jun-13 |
Sep-13 |
Dec-13 |
Mar-14 |
Jun-13 |
Sep-13 |
Dec-13 |
Mar-14 |
Options: General |
Three-month ahead |
One-year ahead |
Prices will increase |
99.1 |
87.3 |
86.8 |
89.2 |
98.3 |
92.5 |
92.7 |
94.1 |
Price increase more than current rate |
66.1 |
74.5 |
55.3 |
51.2 |
71.3 |
76.6 |
61.1 |
59.0 |
Price increase similar to current rate |
25.6 |
11.3 |
24.0 |
28.4 |
18.7 |
13.0 |
25.1 |
25.7 |
Price increase less than current rate |
7.5 |
1.5 |
7.5 |
9.6 |
8.3 |
2.9 |
6.5 |
9.3 |
No change in prices |
0.8 |
7.8 |
9.5 |
8.3 |
1.7 |
4.6 |
4.0 |
3.5 |
Decline in price |
0.1 |
4.9 |
3.7 |
2.5 |
0.1 |
2.9 |
3.3 |
2.4 |
Options: Food Product |
Three-month ahead |
One-year ahead |
Prices will increase |
98.2 |
84.3 |
84.8 |
88.6 |
98.0 |
89.0 |
91.5 |
93.8 |
Price increase more than current rate |
67.8 |
72.5 |
50.9 |
51.9 |
72.9 |
74.8 |
58.5 |
57.6 |
Price increase similar to current rate |
24.4 |
10.6 |
25.5 |
26.3 |
17.9 |
11.5 |
26.2 |
26.3 |
Price increase less than current rate |
6.0 |
1.3 |
8.4 |
10.4 |
7.2 |
2.7 |
6.8 |
9.9 |
No change in prices |
1.7 |
10.1 |
9.9 |
8.7 |
1.9 |
7.1 |
5.0 |
4.0 |
Decline in price |
0.1 |
5.6 |
5.3 |
2.7 |
0.1 |
3.9 |
3.5 |
2.2 |
Options: Non-Food Product |
Three-month ahead |
One-year ahead |
Prices will increase |
97.9 |
77.5 |
78.8 |
80.6 |
97.9 |
80.9 |
87.4 |
87.5 |
Price increase more than current rate |
59.0 |
66.1 |
44.6 |
42.5 |
68.2 |
67.8 |
50.4 |
48.1 |
Price increase similar to current rate |
29.9 |
10.3 |
25.4 |
27.2 |
21.9 |
11.4 |
28.5 |
28.5 |
Price increase less than current rate |
9.0 |
1.2 |
8.8 |
10.8 |
7.8 |
1.7 |
8.5 |
10.8 |
No change in prices |
2.1 |
18.0 |
17.6 |
16.5 |
2.1 |
14.4 |
9.4 |
9.7 |
Decline in price |
0.1 |
4.5 |
3.6 |
3.0 |
0.1 |
4.7 |
3.2 |
2.9 |
Options: Household Durables |
Three-month ahead |
One-year ahead |
Prices will increase |
89.6 |
73.6 |
75.0 |
70.5 |
95.0 |
80.1 |
84.5 |
81.5 |
Price increase more than current rate |
48.0 |
63.2 |
42.0 |
35.4 |
56.0 |
67.9 |
49.1 |
44.2 |
Price increase similar to current rate |
30.0 |
9.2 |
24.0 |
23.1 |
26.1 |
10.7 |
26.2 |
25.6 |
Price increase less than current rate |
11.6 |
1.2 |
9.0 |
12.0 |
12.9 |
1.5 |
9.2 |
11.7 |
No change in prices |
9.9 |
19.7 |
19.4 |
21.1 |
4.8 |
14.6 |
10.9 |
12.4 |
Decline in price |
0.5 |
6.6 |
5.6 |
8.4 |
0.1 |
5.4 |
4.6 |
6.0 |
Options: Housing Prices |
Three-month ahead |
One-year ahead |
Prices will increase |
97.4 |
81.9 |
89.2 |
85.5 |
97.9 |
87.3 |
93.6 |
91.6 |
Price increase more than current rate |
64.5 |
74.5 |
66.9 |
58.0 |
69.7 |
78.9 |
71.0 |
66.2 |
Price increase similar to current rate |
25.3 |
6.9 |
17.9 |
21.1 |
21.5 |
7.6 |
18.5 |
19.2 |
Price increase less than current rate |
7.6 |
0.5 |
4.4 |
6.4 |
6.7 |
0.8 |
4.1 |
6.3 |
No change in prices |
2.4 |
11.9 |
8.0 |
10.2 |
1.9 |
7.5 |
3.8 |
4.4 |
Decline in price |
0.2 |
6.2 |
2.8 |
4.4 |
0.1 |
5.3 |
2.6 |
4.0 |
Options: Cost of Services |
Three-month ahead |
One-year ahead |
Prices will increase |
96.0 |
74.9 |
82.2 |
83.1 |
96.0 |
82.8 |
89.9 |
90.4 |
Price increase more than current rate |
62.0 |
63.5 |
49.7 |
48.0 |
67.7 |
68.8 |
56.2 |
54.8 |
Price increase similar to current rate |
27.1 |
10.5 |
25.7 |
26.5 |
21.1 |
11.8 |
26.2 |
25.4 |
Price increase less than current rate |
6.9 |
0.9 |
6.8 |
8.7 |
7.2 |
2.2 |
7.4 |
10.2 |
No change in prices |
3.8 |
20.6 |
15.3 |
14.5 |
3.8 |
13.2 |
7.6 |
7.2 |
Decline in price |
0.2 |
4.5 |
2.5 |
2.4 |
0.1 |
3.9 |
2.6 |
2.4 |
Table 3: Expecting General Price Movements in Coherence with Movements in Price Expectations of Various Product Groups: Three-month ahead and One-year ahead |
(Percentage of respondents) |
Round No. |
Survey Quarter ended |
Food |
Non-Food |
Households durables |
Housing |
Cost of services |
Three-month ahead period |
32 |
Jun-13 |
85.0 |
83.5 |
69.6 |
83.8 |
83.8 |
33 |
Sep-13 |
77.9 |
69.2 |
65.9 |
69.4 |
64.2 |
34 |
Dec-13 |
72.5 |
61.9 |
56.1 |
59.8 |
60.1 |
35 |
Mar-14 |
72.0 |
61.6 |
51.7 |
60.3 |
60.8 |
One-year ahead period |
32 |
Jun-13 |
89.9 |
88.7 |
77.4 |
86.8 |
87.7 |
33 |
Sep-13 |
81.6 |
73.2 |
70.9 |
74.8 |
71.8 |
34 |
Dec-13 |
77.8 |
68.8 |
65.2 |
69.7 |
70.0 |
35 |
Mar-14 |
77.9 |
67.7 |
61.3 |
69.4 |
69.9 |
Table 4: Household Inflation Expectations - Current, Three-month Ahead and One-year Ahead |
Survey Round |
Survey Quarter Ended |
Inflation rate in Per cent |
Current |
Three-month ahead |
One-year ahead |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
32 |
Jun-13 |
11.0 |
10.5 |
3.9 |
11.7 |
11.4 |
3.7 |
12.4 |
12.7 |
3.8 |
33 |
Sep-13 |
11.8 |
11.0 |
4.3 |
12.8 |
14.5 |
4.0 |
13.5 |
16.0 |
4.0 |
34 |
Dec-13 |
12.3 |
13.2 |
4.4 |
12.2 |
13.9 |
4.7 |
13.5 |
16.0 |
4.0 |
35 |
Mar-14 |
12.2 |
13.3 |
4.3 |
12.3 |
12.9 |
4.1 |
13.1 |
15.3 |
4.3 |
Table 5: Factors that Explain the Total Variability |
Round No. |
Survey Quarter |
Current |
Three-month ahead |
One-year ahead |
32 |
Jun-13 |
City, Category |
City |
City |
33 |
Sep-13 |
City, Age group |
City, Age group |
City |
34 |
Dec-13 |
City, Gender, Age-group |
City, Category |
City, Category |
35 |
Mar-14 |
City, Category, Gender, Age-group |
City, Category, Gender |
City, Category, Gender |
Note: Results based on exercise using Analysis of Variance. |
Table 6: Various Group-wise Inflation Expectations for March 2014 Survey Round |
|
Current |
Three-month ahead |
One-year ahead |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev |
Gender-wise |
Male |
12.3 |
14.1 |
4.2 |
12.5 |
13.4 |
4.1 |
13.2 |
15.4 |
4.2 |
Female |
12.0 |
12.3 |
4.4 |
12.1 |
12.4 |
4.2 |
12.9 |
15.2 |
4.3 |
Category-wise |
Financial Sector Employees |
12.4 |
14.2 |
4.2 |
12.2 |
12.6 |
4.2 |
12.7 |
15.2 |
4.6 |
Other Employees |
11.5 |
11.0 |
4.5 |
11.7 |
12.1 |
4.3 |
12.3 |
14.2 |
4.5 |
Self Employed |
12.2 |
12.9 |
4.2 |
12.4 |
12.9 |
4.0 |
13.1 |
15.3 |
4.3 |
Housewives |
12.4 |
14.1 |
4.2 |
12.4 |
13.0 |
4.1 |
13.3 |
15.4 |
4.1 |
Retired Persons |
12.8 |
14.6 |
3.9 |
13.0 |
14.4 |
3.9 |
14.0 |
16.0 |
3.7 |
Daily Workers |
12.6 |
14.4 |
4.1 |
13.0 |
14.5 |
4.0 |
13.8 |
16.1 |
4.0 |
Other category |
10.7 |
10.3 |
4.5 |
11.3 |
11.6 |
4.4 |
12.2 |
13.4 |
4.4 |
Age-wise |
Up to 25 years |
11.3 |
10.7 |
4.4 |
11.7 |
11.8 |
4.3 |
12.5 |
14.3 |
4.4 |
25 to 30 years |
12.0 |
12.2 |
4.4 |
12.1 |
12.3 |
4.2 |
12.7 |
14.8 |
4.6 |
30 to 35 years |
12.0 |
11.9 |
4.3 |
12.1 |
12.5 |
4.2 |
12.9 |
15.2 |
4.3 |
35 to 40 years |
12.1 |
12.1 |
4.3 |
12.4 |
13.0 |
4.0 |
13.1 |
15.3 |
4.2 |
40 to 45 years |
12.2 |
13.9 |
4.5 |
12.3 |
13.5 |
4.4 |
13.0 |
15.4 |
4.5 |
45 to 50 years |
13.0 |
15.0 |
4.1 |
12.9 |
14.4 |
3.9 |
13.4 |
15.7 |
4.2 |
50 to 55 years |
13.0 |
14.8 |
3.9 |
12.7 |
14.0 |
3.9 |
13.6 |
16.0 |
3.8 |
55 to 60 years |
12.6 |
14.4 |
4.1 |
12.9 |
14.5 |
4.1 |
13.6 |
15.8 |
4.0 |
60 years and above |
13.1 |
14.8 |
3.8 |
13.0 |
14.3 |
3.7 |
14.1 |
16.1 |
3.5 |
City-wise |
Mumbai |
11.8 |
11.4 |
4.4 |
11.7 |
11.3 |
4.1 |
12.4 |
13.8 |
4.1 |
Delhi |
10.4 |
10.2 |
5.0 |
10.6 |
11.0 |
5.1 |
11.0 |
10.8 |
5.1 |
Chennai |
12.9 |
15.3 |
4.3 |
13.2 |
14.8 |
3.8 |
13.3 |
16.1 |
4.7 |
Kolkata |
13.4 |
15.1 |
3.7 |
13.7 |
15.4 |
3.6 |
14.0 |
16.1 |
3.9 |
Bangalore |
11.5 |
10.8 |
3.9 |
10.4 |
10.5 |
3.8 |
11.5 |
10.7 |
4.2 |
Hyderabad |
7.6 |
5.4 |
4.7 |
7.9 |
5.9 |
4.6 |
8.5 |
6.6 |
4.8 |
Ahmedabad |
13.3 |
15.3 |
3.5 |
13.8 |
15.2 |
3.1 |
14.3 |
16.0 |
3.3 |
Lucknow |
13.3 |
14.5 |
3.6 |
12.0 |
14.1 |
4.2 |
13.9 |
15.2 |
3.5 |
Jaipur |
13.6 |
15.4 |
3.7 |
12.3 |
11.6 |
3.7 |
14.0 |
15.6 |
3.8 |
Bhopal |
10.3 |
9.7 |
4.1 |
12.0 |
11.7 |
3.8 |
12.6 |
13.9 |
3.9 |
Patna |
12.8 |
12.0 |
3.3 |
13.2 |
13.3 |
2.9 |
14.3 |
16.1 |
3.1 |
Guwahati |
12.6 |
13.6 |
4.0 |
14.1 |
16.0 |
3.3 |
15.2 |
16.3 |
2.5 |
Thiruvananthapuram |
13.1 |
14.3 |
3.1 |
12.2 |
11.7 |
3.2 |
13.9 |
15.6 |
3.2 |
Bhubaneswar |
10.3 |
10.2 |
3.7 |
10.5 |
10.7 |
3.6 |
12.0 |
11.6 |
3.7 |
Nagpur |
15.3 |
15.7 |
1.7 |
14.6 |
14.8 |
2.3 |
15.2 |
16.2 |
2.6 |
Kolhapur |
13.7 |
15.2 |
3.1 |
14.4 |
15.9 |
2.7 |
14.2 |
16.1 |
3.2 |
All |
12.2 |
13.3 |
4.3 |
12.3 |
12.9 |
4.1 |
13.1 |
15.3 |
4.3 |
Table 7: Cross-tabulation of Current and Three-month Ahead Inflation Expectations |
(Number of respondents) |
|
Three-month ahead inflation rate (per cent) |
Current inflation rate (per cent) |
|
<1 |
1-2 |
2-3 |
3-4 |
4-5 |
5-6 |
6-7 |
7-8 |
8-9 |
9-10 |
10-11 |
11-12 |
12-13 |
13-14 |
14-15 |
15-16 |
>=16 |
No idea |
Total |
<1 |
16 |
|
2 |
4 |
1 |
1 |
|
|
|
|
1 |
|
|
|
|
|
|
3 |
28 |
1-2 |
|
11 |
14 |
6 |
3 |
1 |
|
|
|
1 |
|
|
|
|
|
|
|
2 |
38 |
2-3 |
2 |
9 |
14 |
24 |
15 |
3 |
3 |
|
1 |
|
1 |
|
|
|
|
|
|
3 |
75 |
3-4 |
3 |
4 |
10 |
14 |
13 |
14 |
2 |
2 |
2 |
|
1 |
|
|
|
|
|
|
3 |
68 |
4-5 |
2 |
7 |
14 |
6 |
76 |
26 |
16 |
10 |
5 |
11 |
2 |
|
1 |
|
|
|
|
8 |
184 |
5-6 |
1 |
5 |
9 |
6 |
6 |
41 |
29 |
38 |
12 |
14 |
14 |
3 |
|
3 |
1 |
5 |
|
13 |
200 |
6-7 |
|
|
4 |
6 |
5 |
7 |
21 |
11 |
16 |
26 |
5 |
1 |
|
|
2 |
|
1 |
13 |
118 |
7-8 |
1 |
2 |
4 |
1 |
|
|
6 |
22 |
16 |
27 |
9 |
1 |
2 |
1 |
|
1 |
5 |
2 |
100 |
8-9 |
|
|
|
3 |
2 |
3 |
2 |
6 |
17 |
17 |
20 |
10 |
6 |
1 |
1 |
|
4 |
11 |
103 |
9-10 |
|
|
|
|
|
|
4 |
3 |
6 |
161 |
62 |
114 |
43 |
15 |
44 |
11 |
53 |
79 |
595 |
10-11 |
1 |
|
|
|
|
|
5 |
1 |
3 |
12 |
249 |
148 |
94 |
17 |
26 |
31 |
49 |
62 |
698 |
11-12 |
1 |
|
|
|
|
|
3 |
1 |
1 |
4 |
15 |
24 |
29 |
14 |
12 |
10 |
16 |
15 |
145 |
12-13 |
2 |
|
|
|
|
|
1 |
2 |
|
2 |
4 |
12 |
13 |
18 |
13 |
12 |
5 |
7 |
91 |
13-14 |
|
|
|
|
|
|
2 |
1 |
|
1 |
1 |
5 |
4 |
10 |
14 |
5 |
8 |
7 |
58 |
14-15 |
9 |
|
|
|
|
|
2 |
2 |
3 |
14 |
10 |
10 |
10 |
13 |
117 |
95 |
63 |
63 |
411 |
15-16 |
1 |
|
|
|
|
|
5 |
1 |
2 |
7 |
16 |
13 |
15 |
21 |
147 |
72 |
165 |
31 |
496 |
>=16 |
|
|
|
|
|
|
8 |
6 |
4 |
56 |
111 |
5 |
4 |
6 |
54 |
98 |
884 |
282 |
1518 |
Total |
39 |
38 |
71 |
70 |
121 |
96 |
109 |
106 |
88 |
353 |
521 |
346 |
221 |
119 |
431 |
340 |
1253 |
604 |
4926 |
Note: The shaded cells represent the number of respondents who expressed double digit current and three-month ahead inflation. |
Table 8: Cross-tabulation of Current and One-year Ahead Inflation Expectations |
(Number of respondents) |
|
One-year ahead inflation rate ( per cent) |
Current inflation rate (per cent) |
|
<1 |
1-2 |
2-3 |
3-4 |
4-5 |
5-6 |
6-7 |
7-8 |
8-9 |
9-10 |
10-11 |
11-12 |
12-13 |
13-14 |
14-15 |
15-16 |
>=16 |
No idea |
Total |
<1 |
9 |
7 |
|
2 |
1 |
2 |
1 |
|
1 |
|
1 |
|
|
|
|
|
1 |
3 |
28 |
1-2 |
10 |
10 |
4 |
4 |
1 |
2 |
1 |
1 |
|
2 |
|
|
2 |
|
|
|
|
1 |
38 |
2-3 |
|
6 |
26 |
7 |
9 |
8 |
4 |
3 |
|
3 |
1 |
|
1 |
|
2 |
|
|
5 |
75 |
3-4 |
2 |
2 |
|
17 |
16 |
|
10 |
6 |
3 |
2 |
3 |
1 |
|
|
|
|
1 |
5 |
68 |
4-5 |
|
4 |
2 |
12 |
47 |
46 |
11 |
12 |
5 |
10 |
7 |
2 |
|
1 |
|
1 |
7 |
17 |
184 |
5-6 |
|
|
2 |
|
11 |
61 |
23 |
14 |
7 |
22 |
19 |
4 |
2 |
4 |
4 |
5 |
10 |
12 |
200 |
6-7 |
2 |
|
|
|
|
10 |
32 |
12 |
8 |
21 |
10 |
2 |
1 |
1 |
4 |
2 |
4 |
9 |
118 |
7-8 |
|
1 |
|
|
2 |
|
8 |
18 |
9 |
11 |
10 |
11 |
6 |
1 |
3 |
4 |
8 |
8 |
100 |
8-9 |
|
1 |
|
|
1 |
1 |
1 |
9 |
24 |
15 |
7 |
5 |
6 |
2 |
5 |
7 |
11 |
8 |
103 |
9-10 |
2 |
1 |
1 |
1 |
3 |
3 |
2 |
|
35 |
139 |
91 |
18 |
13 |
12 |
38 |
21 |
137 |
78 |
595 |
10-11 |
1 |
1 |
1 |
|
1 |
3 |
2 |
1 |
2 |
60 |
165 |
128 |
15 |
17 |
26 |
66 |
142 |
67 |
698 |
11-12 |
4 |
|
|
|
1 |
|
|
1 |
|
|
15 |
29 |
20 |
3 |
9 |
10 |
27 |
26 |
145 |
12-13 |
1 |
2 |
|
|
|
|
1 |
|
|
|
2 |
9 |
17 |
14 |
2 |
17 |
16 |
10 |
91 |
13-14 |
1 |
4 |
|
|
|
|
1 |
|
|
|
1 |
|
3 |
10 |
10 |
8 |
13 |
7 |
58 |
14-15 |
2 |
3 |
|
|
|
1 |
4 |
|
|
1 |
2 |
2 |
|
27 |
104 |
81 |
117 |
67 |
411 |
15-16 |
2 |
3 |
1 |
|
2 |
4 |
6 |
3 |
1 |
1 |
2 |
2 |
3 |
6 |
59 |
133 |
231 |
37 |
496 |
>=16 |
5 |
1 |
|
1 |
2 |
3 |
23 |
1 |
|
4 |
11 |
|
|
2 |
15 |
14 |
1158 |
278 |
1518 |
Total |
41 |
46 |
37 |
44 |
97 |
144 |
130 |
81 |
95 |
291 |
347 |
213 |
89 |
100 |
281 |
369 |
1883 |
638 |
4926 |
Note: The shaded cells represent the number of respondents who expressed double digit current and one-year ahead inflation. |
|