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Date : Sep 29, 2015
Inflation Expectations Survey of Households: September 2015

The Inflation Expectations Survey of Households for September 2015 (41st round) captures the inflation expectations of 4,903 urban households across 16 cities, for the next three-month period and the next one-year period. These expectations are based on their individual consumption baskets and hence these rates should not be considered as benchmark of official measure of inflation. The households’ inflation expectations provide useful directional information on near-term inflationary pressures and also supplement other economic indicators.

Highlights:

I. In terms of qualitative responses, the majority of the respondents continues to expect similar or lower rate of price change or expects the prices to remain unchanged or even fall. The proportion of respondents expecting prices to rise by ‘more than current rate’ for prices in general as well as prices in various product groups has decreased nominally as compared to previous round of survey for both three-month ahead period and one-year ahead period (Table 2).

II. In terms of quantitative responses, common respondents continue to expect a nominal 60 basis points rise from their current median inflation perceptions for three-month ahead period based on their own consumption and buying experiences (Chart 1).

III. The survey shows that retired persons, self-employed, housewives and daily workers have comparatively higher inflation expectations for three-month ahead period based on median inflation rates. Respondents from Guwahati, Ahmedabad, Kolkata, and Nagpur cities expect relatively higher inflation for next three months.


Table 1: Respondents’ Profile (Category): Share in Total Sample
Category of Respondents Share in Total (%) Target Share (%)
Financial Sector Employees 10.0 10.0
Other Employees 15.9 15.0
Self-employed 19.7 20.0
Housewives 29.0 30.0
Retired Persons 10.1 10.0
Daily Workers 9.7 10.0
Others 5.7 5.0
Note: The above sample proportion is for the round ended September 2015 survey

Table 2: Product-wise Expectations of Prices for Three-month Ahead and One-year Ahead
(Percentage of respondents)
Round No./Survey Period 37 38 39 40 41 37 38 39 40 41
(Round ended) → Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
Options: General Three-month ahead
Prices will increase 86.4 72.4 73.6 81.0 81.1 90.0 79.8 82.2 90.9 89.0
Price increase more than current rate 43.9 25.7 28.3 34.4 32.1 48.0 32.1 32.9 41.7 38.8
Price increase similar to current rate 28.8 27.0 24.0 24.3 22.0 27.4 29.9 28.8 28.8 24.8
Price increase less than current rate 13.7 19.8 21.2 22.3 26.9 14.6 17.8 20.6 20.4 25.4
No change in prices 9.0 16.5 15.4 13.9 12.8 5.5 11.2 10.0 5.8 5.8
Decline in price 4.6 11.0 11.1 5.2 6.1 4.5 9.0 7.8 3.3 5.2
Options: Food Product Three-month ahead
Prices will increase 85.9 72.3 74.4 83.1 82.0 89.5 79.9 82.4 91.9 87.6
Price increase more than current rate 41.9 25.2 27.9 35.1 33.7 46.2 30.7 32.0 39.1 38.2
Price increase similar to current rate 28.1 28.5 25.2 25.7 24.1 27.7 30.5 29.2 30.5 25.3
Price increase less than current rate 15.8 18.5 21.3 22.3 24.1 15.5 18.7 21.1 22.3 24.0
No change in prices 9.0 17.1 15.0 11.7 11.2 5.8 11.3 9.9 5.2 6.6
Decline in price 5.1 10.6 10.6 5.3 6.9 4.7 8.9 7.7 3.0 5.8
Options: Non-Food Product Three-month ahead
Prices will increase 78.5 65.1 64.2 76.0 71.3 83.8 75.1 76.0 85.6 80.4
Price increase more than current rate 34.7 21.2 21.7 27.7 24.7 36.3 26.1 25.8 31.7 29.0
Price increase similar to current rate 27.2 26.1 24.0 26.3 22.7 29.0 30.6 28.4 30.3 23.6
Price increase less than current rate 16.5 17.8 18.5 21.9 23.9 18.4 18.4 21.7 23.6 27.7
No change in prices 17.4 25.6 24.6 20.6 22.4 12.1 16.6 16.3 11.2 13.8
Decline in price 4.2 9.3 11.2 3.4 6.3 4.1 8.3 7.7 3.1 5.8
Options: Household Durables Three-month ahead
Prices will increase 64.0 59.7 68.2 69.1 63.3 76.8 72.1 77.6 82.2 75.5
Price increase more than current rate 27.2 20.4 25.4 25.9 22.1 33.9 27.5 29.2 31.8 28.6
Price increase similar to current rate 22.7 23.8 24.4 24.2 18.9 26.1 27.8 29.2 28.7 22.1
Price increase less than current rate 14.1 15.6 18.4 19.0 22.3 16.9 16.8 19.2 21.7 24.8
No change in prices 24.3 27.3 21.6 23.5 26.3 15.0 16.5 15.5 12.7 15.9
Decline in price 11.7 13.0 10.2 7.4 10.5 8.2 11.4 6.9 5.2 8.6
Options: Housing Prices Three-month ahead
Prices will increase 84.6 78.4 83.2 81.4 77.8 91.5 86.1 90.3 90.1 87.3
Price increase more than current rate 55.5 39.5 46.7 43.1 38.7 60.8 47.9 53.1 50.3 48.7
Price increase similar to current rate 20.3 24.9 21.5 23.7 20.8 22.5 25.6 23.0 24.3 19.4
Price increase less than current rate 8.8 13.9 14.9 14.5 18.3 8.2 12.6 14.2 15.5 19.2
No change in prices 11.4 13.7 11.8 13.8 14.9 5.0 6.6 5.4 6.5 7.0
Decline in price 4.0 7.9 5.0 4.8 7.3 3.5 7.3 4.4 3.4 5.8
Options: Cost of Services Three-month ahead
Prices will increase 79.1 71.6 78.5 79.9 72.0 87.5 81.8 86.9 89.7 84.9
Price increase more than current rate 38.8 28.4 32.7 34.2 28.4 45.4 34.7 37.6 39.5 36.9
Price increase similar to current rate 25.3 26.6 25.7 26.7 20.7 26.9 30.0 29.5 29.7 22.1
Price increase less than current rate 15.0 16.6 20.0 19.1 22.9 15.2 17.2 19.9 20.5 25.8
No change in prices 18.0 21.7 17.9 18.0 23.4 9.8 11.6 9.7 8.2 10.6
Decline in price 2.9 6.7 3.6 2.1 4.7 2.8 6.6 3.3 2.1 4.5

Table 3: Households 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 period ended Food Non-Food Households durables Housing Cost of services
Three-month ahead
37 Sep-14 65.1 53.9 43.9 50.1 51.7
38 Dec-14 62.0 51.9 48.5 48.3 49.5
39 Mar-15 68.8 57.3 43.3 43.1 47.5
40 Jun-15 67.8 51.3 47.2 48.4 52.2
41 Sep-15 70.0 58.9 50.8 53.0 55.9
One-year ahead
37 Sep-14 69.1 59.0 53.3 57.7 59.7
38 Dec-14 66.8 57.8 53.5 53.3 56.6
39 Mar-15 70.5 61.8 51.5 52.0 55.8
40 Jun-15 70.2 62.2 58.5 59.8 62.8
41 Sep-15 69.5 60.4 54.7 59.0 60.0

Table 4: Household Inflation Expectations -Current, Three-Month Ahead and One-year Ahead
Survey Round Survey period 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.
37 Sep-14 12.7 13.8 4.0 12.7 14.6 4.4 13.5 16.0 4.0
38 Dec-14 9.0 8.8 4.2 8.8 8.3 4.5 9.3 8.9 4.6
39 Mar-15 9.1 9.0 4.0 9.0 8.5 4.3 9.6 9.1 4.5
40 Jun-15 10.0 9.5 4.1 10.1 10.1 4.5 10.8 10.3 4.4
41 Sep-15 10.6 9.9 4.4 10.7 10.5 4.5 11.1 10.8 4.6

Table 5: Factors that Explain the Total Variability
Round No. Survey period
ended
Current Three-month ahead One-year ahead
37 Sep-14 City, Age-Group City, Age-Group City
38 Dec-14 City, Category City, Category City, Category
39 Mar-15 City City City
40 Jun-15 City, Category, Age-Group City, Category, Age-Group City, Category, Gender
41 Sep-15 City, Age-Group City, Age-Group City, Age-Group, Gender
Note: Results based on exercise using Analysis of Variance.

Table 6: Various Group-wise Inflation Expectations for September 2015 Survey Round
  Current Three-month ahead One-year ahead
Mean Median Std. Dev. Mean Median Std. Dev. Mean Median Std. Dev.
Gender-wise
Male 10.6  10.0 4.5 10.7 10.5 4.5 10.9  10.7 4.6
Female 10.6 9.9 4.4 10.8 10.5 4.4 11.3 11.0 4.4
 
Financial Sector Employees 10.5 10.0 4.3 10.8 10.5 4.3 10.7 10.4 4.5
Other Employees 10.5 9.8 4.5 10.5 10.2 4.5 10.8 10.6 4.6
Self Employed 10.6 10.0 4.5 10.7 10.6 4.5 11.1 10.8 4.6
Housewives 10.6 9.9 4.3 10.7 10.6 4.4 11.3 10.9 4.4
Retired Persons 11.3 10.7 4.6 11.1 10.8 4.5 11.4 11.8 4.7
Daily Workers 10.6 10.0 4.5 10.9 10.6 4.5 11.1 10.9 4.7
Other category 9.9 9.6 4.4 10.4 10.2 4.5 10.9 10.5 4.4
 
Up to 25 years 9.8 9.5 4.2 10.3 10.1 4.3 10.7 10.4 4.4
25 to 30 years 9.9 9.5 4.3 10.2 9.9 4.4 10.6 10.3 4.5
30 to 35 years 10.4 9.9 4.5 10.5 10.2 4.5 10.9 10.8 4.6
35 to 40 years 10.8 10.1 4.4 10.9 10.6 4.5 11.4 11.3 4.6
40 to 45 years 11.2 10.4 4.4 11.5 11.5 4.4 11.7 11.7 4.4
45 to 50 years 10.8 10.3 4.4 11.0 10.9 4.4 11.2 10.7 4.6
50 to 55 years 11.1 10.3 4.5 11.3 10.9 4.3 11.4 11.2 4.5
55 to 60 years 11.1 10.5 4.6 10.9 10.6 4.6 11.2 11.3 4.8
60 years and above 11.6 10.8 4.5 11.3 10.9 4.5 11.5 11.8 4.7
 
Ahmadabad 12.0 12.5 4.2 12.9 14.6 4.1 12.6 14.1 4.1
Bengaluru 7.2 6.0 4.0 7.3 7.2 3.6 8.0 7.2 4.1
Bhopal 10.4 10.2 3.6 12.4 12.7 3.6 13.6 15.1 3.6
Bhubaneswar 10.5 9.8 3.9 10.4 10.8 4.2 11.7 12.9 4.4
Chennai 12.4 12.5 4.0 11.7 12.6 4.6 12.7 14.4 4.1
Delhi 9.0 7.4 4.7 8.7 7.7 4.4 8.7 7.4 4.8
Guwahati 14.8 16.4 4.2 14.7 16.3 4.1 14.4 16.3 4.2
Hyderabad 8.3 9.0 3.3 9.2 9.6 3.8 9.4 9.8 4.4
Jaipur 10.5 9.7 3.5 11.2 11.5 3.8 11.1 10.3 4.1
Kolhapur 8.6 6.9 4.3 8.9 7.0 4.3 7.1 6.2 3.4
Kolkata 12.9 14.4 3.8 12.8 14.6 4.2 13.2 15.3 3.9
Lucknow 12.5 14.6 4.3 10.8 10.5 4.4 13.1 15.3 4.2
Mumbai 8.1 6.9 3.7 8.7 7.7 3.6 8.7 8.0 3.7
Nagpur 12.0 11.7 4.2 13.0 14.6 4.0 12.1 12.6 4.4
Patna 9.2 9.1 1.0 10.5 10.4 1.2 11.6 11.7 1.5
Thiruvananthapuram 11.2 10.3 4.1 9.2 9.3 4.2 10.1 9.4 4.5
All 10.6 9.9 4.4 10.7 10.5 4.5 11.1 10.8 4.6

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 22 2 0 0 0 3 0 1 0 0 1 1 0 0 0 1 2 4 37
1-2 2 12 5 4 5 1 0 1 0 0 1 0 0 0 0 0 0 5 36
2-3 0 10 11 6 14 2 3 1 0 0 1 0 0 0 0 0 0 8 56
3-4 0 2 10 20 29 14 7 5 2 1 0 0 0 0 1 0 0 13 104
4-5 0 2 19 28 50 67 35 26 6 8 1 1 2 1 1 0 0 29 276
5-6 0 3 4 23 44 103 91 72 26 19 12 1 1 0 1 1 0 19 420
6-7 0 0 1 5 12 46 76 59 36 31 8 6 1 1 0 0 0 6 288
7-8 0 0 2 3 1 28 42 40 63 59 32 9 1 0 4 0 0 4 288
8-9 0 2 1 0 2 7 12 14 21 102 46 9 2 3 2 1 1 2 227
9-10 0 0 7 3 22 10 12 29 38 140 129 114 58 23 80 4 37 54 760
10-11 0 0 7 6 4 21 4 5 8 20 83 97 101 19 33 55 27 43 533
11-12 0 0 2 0 1 2 1 1 2 13 14 24 26 21 27 10 10 8 162
12-13 0 0 0 1 2 3 0 0 1 4 5 4 19 20 11 19 9 3 101
13-14 0 0 1 2 1 1 1 0 0 2 3 0 4 7 4 5 10 1 42
14-15 0 0 1 1 9 0 0 1 0 13 6 3 3 7 34 27 88 23 216
15-16 0 0 3 6 4 8 1 1 0 3 7 3 3 1 13 34 68 17 172
>=16 0 0 16 16 32 20 2 5 8 46 46 2 5 7 20 18 791 151 1185
Total 24 33 90 124 232 336 287 261 211 461 395 274 226 110 231 175 1043 390 4903


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 19 0 3 0 2 0 2 0 0 1 2 0 0 0 0 1 2 5 37
1-2 3 12 2 5 5 2 1 0 0 1 0 0 0 0 0 0 1 4 36
2-3 2 8 16 4 8 6 1 2 1 1 0 0 0 0 0 0 0 7 56
3-4 2 3 23 19 13 12 8 4 3 3 1 1 0 1 1 0 1 9 104
4-5 0 5 10 50 67 18 15 27 7 25 9 0 1 0 2 2 3 35 276
5-6 0 3 3 21 88 121 52 29 20 27 20 4 2 0 5 7 2 16 420
6-7 0 0 1 11 41 73 47 30 20 17 12 8 6 3 3 2 5 9 288
7-8 0 0 1 6 27 18 41 58 20 44 22 7 14 3 6 7 5 9 288
8-9 0 0 0 5 7 9 7 12 31 12 55 26 36 5 7 3 3 9 227
9-10 1 0 1 4 10 12 10 14 121 215 42 64 31 17 78 10 69 61 760
10-11 1 0 3 2 4 16 9 7 3 57 113 38 53 12 34 47 88 46 533
11-12 0 0 1 0 1 1 3 3 3 6 40 37 4 6 17 12 17 11 162
12-13 0 0 0 0 0 0 0 2 5 5 4 12 31 8 7 10 13 4 101
13-14 0 0 1 0 0 0 0 1 1 2 1 1 5 15 3 3 8 1 42
14-15 1 0 1 0 3 1 0 2 4 7 4 2 4 49 58 4 52 24 216
15-16 0 0 0 0 2 2 1 0 1 4 9 2 0 0 31 45 53 22 172
>=16 0 0 0 1 7 18 6 5 9 17 25 6 6 5 17 30 879 154 1185
Total 29 31 66 128 285 309 203 196 249 444 359 208 193 124 269 183 1201 426 4903

1 The previous round of the survey data was published on August 4, 2015 on RBI website. The survey results are based on views of the respondents which are not necessarily shared by the Reserve Bank of India.


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