publications

PDF document (190 kb)
Date : Aug 02, 2017
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the June 2017 round of the Inflation Expectations Survey of Households (IESH)1 conducted in 18 cities. The results are based on responses from 4,737 urban households covering various occupational categories (Table 1).

Highlights:

  1. The proportion of respondents expecting general prices to increase in the next three months was slightly higher than in the previous two rounds and this was reflected across product groups, barring food products (Table 2).

  2. Around half of the respondents who expected the general price level to increase in the next three months also felt that prices would rise by more than the current rate; this proportion has also increased marginally over the May 2017 round of the survey.

  3. The rise in inflation expectations was reflected across all product groups, except housing.

  4. While a higher proportion of respondents expected the general prices to increase over the year ahead, the proportion of respondents who expected the general prices to rise at more than current rate (i.e., implying higher inflation) was lower than in the May 2017 round.

  5. Three months ahead and one year ahead median inflation expectations are stable since the March 2017 round (Chart 1); however, as compared with the June 2016 round, they declined by 170 and 100 basis points, respectively, in the June 2017 round,


Table 1: Respondents’ Profile (Category): Share in Total Sample - June 2017
Category of Respondents Share in Total (%) Target Share (%)
Financial Sector Employees 10.7 10.0
Other Employees 14.4 15.0
Self-employed 19.4 20.0
Housewives 29.5 30.0
Retired Persons 9.9 10.0
Daily Workers 10.3 10.0
Others 5.7 5.0

Table 2: Product-wise Expectations of Prices for Three Months ahead and One Year ahead
(Percentage of respondents)
Round Jun-16 Dec-16 Mar-17 May-17 Jun-17 Jun-16 Dec-16 Mar-17 May-17 Jun-17
Options: General Three Months Ahead One Year Ahead
Prices will increase 85.2 59.9 73.8 70.2 77.2 90.4 68.1 81.0 80.9 82.4
Price increase more than current rate 37.7 28.9 37.9 35.9 39.9 44.8 35.2 44.5 46.3 44.1
Price increase similar to current rate 28.7 23.0 27.3 25.0 26.6 27.6 24.9 28.5 26.4 28.3
Price increase less than current rate 18.8 8.0 8.6 9.3 10.7 18.0 8.0 8.0 8.2 10.1
No change in prices 11.4 26.9 21.5 25.2 16.8 6.3 19.8 13.6 14.3 11.2
Decline in prices 3.4 13.3 4.7 4.6 6.0 3.4 12.2 5.4 4.8 6.4
Options: Food Product Three Months Ahead One Year Ahead
Prices will increase 86.5 61.2 74.2 73.7 71.6 90.1 66.4 78.0 79.8 75.8
Price increase more than current rate 38.3 30.3 39.5 38.6 39.1 44.7 32.2 39.7 42.1 38.0
Price increase similar to current rate 29.3 19.6 24.7 23.6 21.8 28.4 24.1 29.0 27.2 26.8
Price increase less than current rate 18.9 11.3 9.9 11.5 10.7 17.1 10.1 9.3 10.6 11.0
No change in prices 9.1 17.1 16.5 18.2 14.2 5.5 16.6 12.8 11.9 12.4
Decline in prices 4.4 21.7 9.3 8.1 14.3 4.3 17.1 9.2 8.2 11.8
Options: Non-Food Product Three Months Ahead One Year Ahead
Prices will increase 72.7 57.8 69.6 66.3 72.1 82.5 62.2 72.3 73.9 74.8
Price increase more than current rate 27.7 27.4 34.1 32.4 36.9 33.6 29.2 35.1 37.1 36.3
Price increase similar to current rate 26.3 20.6 25.1 23.4 23.6 29.2 23.3 27.5 25.7 27.3
Price increase less than current rate 18.6 9.7 10.4 10.6 11.6 19.7 9.7 9.7 11.1 11.2
No change in prices 23.0 26.2 23.6 26.9 18.1 13.8 23.5 20.3 19.1 16.3
Decline in prices 4.4 16.0 6.8 6.8 9.8 3.7 14.4 7.4 7.0 9.0
Options: Household Durables Three Months Ahead One Year Ahead
Prices will increase 66.6 44.6 54.2 51.1 65.4 79.9 52.7 60.8 62.1 70.3
Price increase more than current rate 26.3 20.9 27.2 25.1 34.7 34.1 24.8 29.7 31.9 35.7
Price increase similar to current rate 23.4 16.4 19.3 17.1 20.6 27.3 18.9 22.8 21.5 24.3
Price increase less than current rate 16.9 7.3 7.6 8.9 10.1 18.6 9.0 8.3 8.8 10.3
No change in prices 25.7 32.5 30.8 33.6 20.6 14.2 27.0 25.3 24.9 17.5
Decline in prices 7.8 22.9 15.1 15.3 14.0 5.9 20.3 13.9 13.0 12.2
Options: Housing Prices Three Months Ahead One Year Ahead
Prices will increase 77.3 44.6 56.7 57.3 64.3 86.6 54.0 68.7 69.7 73.4
Price increase more than current rate 43.8 24.8 32.4 33.2 37.1 52.2 29.6 39.3 39.7 42.2
Price increase similar to current rate 20.6 13.1 16.9 17.0 18.6 21.8 16.7 21.5 22.7 22.4
Price increase less than current rate 12.9 6.6 7.4 7.1 8.7 12.5 7.7 8.0 7.3 8.8
No change in prices 16.2 21.5 24.9 26.4 22.0 8.5 18.0 16.9 17.4 15.1
Decline in prices 6.6 33.9 18.4 16.2 13.6 4.9 28.0 14.3 12.9 11.5
Options: Cost of Services Three Months Ahead One Year Ahead
Prices will increase 78.4 57.6 67.0 61.3 68.9 88.8 66.8 77.4 75.5 78.6
Price increase more than current rate 33.7 27.1 33.6 29.4 35.1 42.8 32.6 38.5 37.3 38.8
Price increase similar to current rate 26.9 21.0 23.8 21.7 23.7 28.5 23.7 28.5 26.8 27.8
Price increase less than current rate 17.9 9.5 9.7 10.2 10.2 17.5 10.5 10.4 11.4 12.0
No change in prices 19.0 29.8 27.5 33.0 25.3 8.5 22.3 17.4 19.1 15.6
Decline in prices 2.6 12.6 5.6 5.7 5.8 2.8 10.9 5.2 5.5 5.9

Table 3: Households Expecting General Price Movements in Coherence with Movements in Price Expectations of Various Product Groups: Three Months Ahead and One Year Ahead
(Percentage of respondents)
Round No. Survey period ended Food Non-Food Households durables Housing Cost of services
Three Months Ahead
44 Jun-16 69.8 60.0 54.5 55.7 59.2
46 Dec-16 55.4 55.8 48.5 47.0 57.7
47 Mar-17 57.1 56.7 48.1 48.3 57.7
47B May-17 59.8 59.7 51.0 52.5 60.3
48 Jun-17 62.0 64.3 57.2 57.6 63.4
One Year Ahead
44 Jun-16 74.7 64.5 60.6 61.5 65.9
46 Dec-16 62.2 59.7 52.8 51.7 62.3
47 Mar-17 62.3 60.4 51.5 54.6 64.1
47B May-17 66.8 64.4 56.4 58.7 67.3
48 Jun-17 68.2 67.7 62.0 63.2 70.0

Table 4: Household Inflation Expectations – Current, Three Months and One Year Ahead
Survey Round Survey Period Ended Inflation rate in Per cent
Current Three Months Ahead One Year Ahead
Mean Median Std. Dev. Mean Median Std. Dev. Mean Median Std. Dev.
44 Jun-16 8.8 8 4.4 9.7 9.2 4.4 10 9.6 4.7
46 Dec-16 7.4 6.5 3.9 7.9 7.3 4.1 8.7 8.3 4.3
47 Mar-17 7.8 6.8 4 8.2 7.5 4.1 9.3 8.8 4.2
47B May-17 7.5 6.3 4 8.1 7.3 4.2 9.2 8.5 4.3
48 Jun-17 7.3 6.4 3.8 8.1 7.5 3.9 9.1 8.6 4.1

Table 5: Factors that Explain the Total Variability
Round No. Survey Period Ended Current Three Months Ahead One Year Ahead
44 Jun-16 City, Age-Group, Category City, Category City, Category
46 Dec-16 City, Gender, Age-Group City, Category, Age-Group City, Category
47 Mar-17 City, Age-Group City, Category City, Category
47B May-17 City, Gender, Category City, Category City, Category
48 Jun-17 City, Age-Group, Category City, Age-Group, Category City, Age-Group, Category

Table 6 : Various Group-wise Inflation Expectations: June 2017
  Current Three Months Ahead One Year Ahead
Mean Median Std. Dev. Mean Median Std. Dev. Mean Median Std. Dev.
Overall 7.3 6.4 3.8 8.1 7.5 3.9 9.1 8.6 4.1
Gender-wise
Male 7.4 6.5 3.8 8.2 7.5 4.0 9.1 8.6 4.2
Female 7.3 6.2 3.8 8.0 7.5 3.9 9.1 8.7 4.0
Category-wise
Financial Sector Employees 7.0 6.0 3.6 7.7 7.2 3.8 8.6 8.2 4.0
Other Employees 7.6 6.7 3.9 8.4 7.8 3.9 9.4 8.9 4.1
Self Employed 7.5 6.5 3.8 8.1 7.5 4.0 9.0 8.5 4.1
Housewives 7.3 6.2 3.8 8.1 7.5 3.8 9.1 8.7 4.1
Retired Persons 7.5 6.5 3.9 8.2 7.6 4.2 9.2 8.9 4.2
Daily Workers 7.5 6.7 3.8 8.2 7.7 4.0 9.1 8.9 4.2
Other category 6.8 5.9 3.8 7.6 7.1 3.8 8.5 8.2 4.2
Age Group-wise
Up to 25 years 7.0 6.2 3.5 7.6 7.2 3.5 8.7 8.4 3.8
25 to 30 years 7.0 6.2 3.6 7.8 7.4 3.7 8.7 8.4 4.0
30 to 35 years 7.4 6.2 4.0 8.1 7.5 4.0 9.0 8.5 4.1
35 to 40 years 7.4 6.5 3.8 8.0 7.6 4.0 9.0 8.7 4.2
40 to 45 years 7.5 6.3 4.0 8.2 7.5 4.1 9.2 8.6 4.2
45 to 50 years 7.4 6.3 4.0 8.3 7.7 4.2 9.1 8.8 4.3
50 to 55 years 7.9 7.0 3.9 8.7 7.8 4.1 9.5 9.0 4.1
55 to 60 years 7.9 6.9 3.9 8.8 8.2 4.0 10.1 10.0 4.0
60 years and above 7.7 6.8 4.0 8.5 7.7 4.3 9.4 9.1 4.4
City-wise
Ahmedabad 7.9 7.6 2.7 8.9 8.3 2.7 9.2 8.7 2.8
Bengaluru 4.9 4.8 2.0 6.0 5.4 3.0 7.1 5.8 3.9
Bhopal 5.9 5.5 2.3 7.7 7.9 2.8 9.4 9.7 3.7
Bhubaneswar 7.8 6.0 3.7 9.5 8.7 4.1 10.9 10.6 4.5
Chennai 7.5 5.9 3.8 8.0 7.5 4.0 10.4 10.6 3.9
Delhi 6.3 5.7 2.9 7.0 6.6 2.9 7.4 7.1 3.0
Guwahati 9.9 10.6 5.9 9.1 10.1 6.1 9.4 10.1 5.9
Hyderabad 6.3 6.3 0.9 6.9 6.9 1.1 7.6 7.8 1.4
Jaipur 8.2 7.9 3.1 9.3 9.0 3.5 10.7 10.7 3.9
Kolkata 9.4 8.3 4.3 10.5 9.6 4.1 11.6 10.9 4.1
Lucknow 6.4 5.8 2.7 7.4 7.2 3.1 8.1 7.8 3.5
Mumbai 8.4 8.5 3.4 8.3 8.6 3.8 8.9 9.5 4.0
Nagpur 5.6 5.0 4.0 6.4 5.7 4.0 7.6 6.7 4.1
Patna 6.3 6.2 1.1 7.0 7.0 1.4 8.2 8.2 1.7
Thiruvananthapuram 9.4 8.3 4.5 10.5 9.8 4.3 11.9 12.3 4.3
Chandigarh 8.0 7.2 3.9 8.4 7.9 3.8 8.8 8.1 3.9
Ranchi 3.8 3.4 2.0 4.4 4.0 2.1 5.6 5.5 2.5
Raipur 6.2 5.7 3.3 7.5 7.1 3.9 7.7 7.8 4.1

Table 7: Cross-tabulation of Current and Three Months Ahead Inflation Expectations: June 2017
(Number of respondents)
Three Months 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 28 19 10 5 1 6 0 0 1 0 6 0 0 0 1 0 2 2 81
1-<2 4 37 32 10 1 3 1 2 0 0 0 0 0 0 0 1 0 4 95
2-<3 2 12 89 86 25 21 2 0 2 0 0 0 2 0 0 1 0 4 246
3-<4 0 8 33 114 73 84 15 8 4 1 3 0 0 0 0 1 0 4 348
4-<5 0 3 10 14 106 123 67 38 13 3 4 0 0 0 0 0 0 7 388
5-<6 7 4 34 21 33 247 255 237 98 11 54 1 1 0 0 3 2 8 1016
6-<7 2 1 1 6 6 18 135 226 83 19 12 0 5 0 0 1 0 9 524
7-<8 2 1 0 1 2 13 25 108 129 76 43 1 6 0 0 1 0 0 408
8-<9 1 1 7 2 6 4 3 9 113 95 72 9 7 2 1 3 1 3 339
9-<10 0 0 0 0 0 4 1 2 5 43 44 26 15 1 1 2 2 7 153
10-<11 4 3 4 10 4 28 3 8 12 6 151 57 125 23 11 73 24 11 557
11-<12 7 0 0 1 1 1 0 0 0 2 2 22 12 11 3 9 3 4 78
12-<13 0 0 0 0 0 1 0 0 1 1 1 0 16 10 8 12 5 0 55
13-<14 1 0 0 0 2 0 0 0 0 0 0 0 0 3 1 8 3 1 19
14-<15 1 0 0 0 0 0 0 0 1 0 0 0 0 0 3 3 6 1 15
15-<16 1 0 0 0 1 13 3 0 0 1 7 0 3 1 0 41 48 2 121
>=16 9 0 0 4 0 9 0 0 0 0 14 0 4 1 0 10 217 26 294
Total 69 89 220 274 261 575 510 638 462 258 413 116 196 52 29 169 313 93 4737

Table 8: Cross-tabulation of Current and One Year Ahead Inflation Expectations: June 2017
(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 23 4 14 4 7 11 1 0 2 3 7 0 0 0 0 2 2 1 81
1-<2 1 26 20 16 9 12 3 0 1 0 0 0 1 0 0 2 1 3 95
2-<3 5 6 70 38 47 38 19 4 3 2 5 0 1 0 0 2 2 4 246
3-<4 1 13 22 88 44 56 37 23 27 7 12 2 4 0 0 2 0 10 348
4-<5 0 2 10 14 74 63 66 47 37 20 20 8 7 0 0 3 0 17 388
5-<6 2 2 12 23 32 161 131 208 112 55 160 33 22 5 5 24 12 17 1016
6-<7 0 2 2 4 7 28 73 123 142 41 51 11 17 4 1 8 1 9 524
7-<8 2 1 1 2 4 14 12 73 81 90 66 12 16 6 8 12 1 7 408
8-<9 2 0 4 4 5 6 8 8 55 66 100 21 27 6 6 11 7 3 339
9-<10 0 0 0 0 1 3 1 2 5 23 35 27 23 7 7 12 3 4 153
10-<11 8 1 1 3 2 28 3 4 15 6 123 32 64 28 30 100 88 21 557
11-<12 4 0 1 0 1 2 0 0 0 1 2 16 10 11 2 9 10 9 78
12-<13 0 0 0 0 0 0 0 0 0 1 2 0 10 6 1 20 14 1 55
13-<14 0 0 0 2 0 1 0 0 0 0 0 0 0 1 1 2 11 1 19
14-<15 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 9 3 15
15-<16 1 1 1 0 0 6 1 1 1 0 7 0 4 1 1 29 58 9 121
>=16 9 0 0 4 1 9 0 0 1 1 14 0 2 2 1 11 215 24 294
Total 59 58 158 202 234 438 355 493 482 316 604 162 208 77 63 251 434 143 4737

1 The survey is conducted at regular intervals by the Reserve Bank of India. It provides useful directional information on near-term inflationary pressures and also supplements other economic indicators. However, these expectations are formed by the respondents and may reflect their consumption pattern. Hence, it should not be treated as benchmarks for official measures of inflation.


Top