Click here to Visit the RBI’s new website

publications

PDF document (198 kb)
Date : Jun 06, 2018
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the May 2018 round of its Inflation Expectations Survey of Households (IESH)1. The survey was conducted in 18 cities and the results are based on responses from 5,289 urban households covering various occupational categories (Table 1).

Highlights:

  1. The proportion of respondents expecting prices to increase at more than the current rate in the next three months and over the year ahead rose in the May 2018 round after falling in the previous two rounds (Table 2).

  2. Three months ahead and one year ahead median inflation expectations rose by 90 basis points (bps) and 130 bps, respectively, as compared with the March 2018 round (Chart 1, Table 4).

  3. Three months ahead and one year ahead median inflation expectations increased by 140 bps each when compared with the May 2017 round.

Note: Please see the excel file for time series data

Table 1: Respondents’ Profile (Category): Share in Total Sample – May 2018
Category of Respondents Share in Total (%) Target Share (%)
Financial Sector Employees 9.3 10.0
Other Employees 15.5 15.0
Self-employed 20.3 20.0
Homemakers 29.4 30.0
Retired Persons 9.2 10.0
Daily Workers 10.4 10.0
Others 6.0 5.0

Table 2: Product-wise Expectations of Prices for Three Months ahead and One Year ahead
(Percentage of Respondents)
Round May-17 Nov-17 Dec-17 Mar-18 May-18 May-17 Nov-17 Dec-17 Mar-18 May-18
Options: General Three Months Ahead One Year Ahead
Prices will increase 70.2 81.4 80.5 80.2 82.3 80.9 92.7 92.7 90.8 91.1
Price increase more than current rate 35.9 53.2 49.8 45.4 50.5 46.3 64.1 63.0 56.7 62.6
Price increase similar to current rate 25.0 23.1 24.6 27.2 25.1 26.4 23.8 23.9 28.0 23.4
Price increase less than current rate 9.3 5.1 6.1 7.5 6.7 8.2 4.8 5.8 6.2 5.0
No change in prices 25.2 16.3 17.4 17.8 16.0 14.3 5.5 5.3 7.0 6.5
Decline in prices 4.6 2.3 2.0 2.1 1.7 4.8 1.8 2.0 2.2 2.4
Options: Food Product Three Months Ahead One Year Ahead
Prices will increase 73.7 80.3 78.1 79.6 82.0 79.8 85.7 85.0 85.0 85.6
Price increase more than current rate 38.6 50.4 45.8 44.0 48.3 42.1 54.0 52.1 47.4 53.4
Price increase similar to current rate 23.6 23.2 23.4 24.9 24.5 27.2 25.2 24.9 28.9 25.2
Price increase less than current rate 11.5 6.7 8.9 10.7 9.3 10.6 6.5 8.1 8.7 7.0
No change in prices 18.2 12.9 15.5 15.4 13.5 11.9 9.0 10.4 10.2 9.4
Decline in prices 8.1 6.8 6.4 5.0 4.5 8.2 5.3 4.6 4.8 5.0
Options: Non-Food Product Three Months Ahead One Year Ahead
Prices will increase 66.3 75.7 73.3 75.0 78.4 73.9 81.4 80.5 80.0 82.7
Price increase more than current rate 32.4 47.1 41.2 39.6 45.8 37.1 51.2 48.8 44.2 51.1
Price increase similar to current rate 23.4 21.9 23.3 25.4 24.0 25.7 23.5 23.7 26.8 25.3
Price increase less than current rate 10.6 6.7 8.8 10.0 8.6 11.1 6.7 7.9 9.0 6.3
No change in prices 26.9 19.5 21.9 20.8 18.1 19.1 14.4 15.4 15.8 13.2
Decline in prices 6.8 4.8 4.8 4.2 3.6 7.0 4.2 4.2 4.3 4.1
Options: Household Durables Three Months Ahead One Year Ahead
Prices will increase 51.1 61.9 60.0 63.7 63.2 62.1 71.0 68.8 71.1 72.5
Price increase more than current rate 25.1 38.6 35.0 34.7 36.7 31.9 44.5 42.3 40.1 45.2
Price increase similar to current rate 17.1 17.4 18.6 20.7 19.9 21.5 20.7 19.8 23.4 21.5
Price increase less than current rate 8.9 5.8 6.4 8.3 6.6 8.8 5.8 6.7 7.7 5.8
No change in prices 33.6 26.8 28.8 26.2 26.8 24.9 20.3 21.7 19.9 19.2
Decline in prices 15.3 11.3 11.3 10.1 10.0 13.0 8.7 9.5 9.0 8.3
Options: Housing Prices Three Months Ahead One Year Ahead
Prices will increase 57.3 70.5 69.5 70.0 71.6 69.7 78.8 78.3 80.2 79.8
Price increase more than current rate 33.2 48.4 45.9 43.9 47.6 39.7 54.5 53.3 50.9 55.2
Price increase similar to current rate 17.0 17.0 18.0 18.8 18.2 22.7 19.4 19.2 22.5 19.6
Price increase less than current rate 7.1 5.0 5.6 7.3 5.8 7.3 4.9 5.9 6.8 5.0
No change in prices 26.4 20.1 21.0 22.3 20.8 17.4 13.6 14.0 13.9 13.9
Decline in prices 16.2 9.5 9.5 7.7 7.7 12.9 7.7 7.6 5.9 6.3
Options: Cost of Services Three Months Ahead One Year Ahead
Prices will increase 61.3 71.1 71.5 70.2 72.0 75.5 83.4 82.8 82.6 84.2
Price increase more than current rate 29.4 44.3 41.4 38.3 42.9 37.3 51.5 50.5 45.3 52.9
Price increase similar to current rate 21.7 20.7 23.2 23.5 22.6 26.8 25.2 24.3 28.6 24.4
Price increase less than current rate 10.2 6.2 6.8 8.3 6.6 11.4 6.7 8.0 8.7 6.9
No change in prices 33.0 25.8 25.6 26.6 25.6 19.1 14.0 14.2 14.9 13.5
Decline in prices 5.7 3.1 3.0 3.3 2.4 5.5 2.6 3.0 2.5 2.4
Note: Constituent items may not add up to totals, due to rounding off.

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)
Survey period ended Food Non-Food Households durables Housing Cost of services
Three Months Ahead
May-17 59.8 59.7 51.0 52.5 60.3
Nov-17 66.6 67.4 57.1 60.3 65.7
Dec-17 64.9 64.1 55.5 58.4 63.8
Mar-18 63.7 63.2 55.6 57.8 62.7
May-18 67.5 65.6 56.6 60.0 65.0
One Year Ahead
May-17 66.8 64.4 56.4 58.7 67.3
Nov-17 72.7 70.5 60.9 66.2 71.3
Dec-17 70.1 69.0 58.8 65.1 70.5
Mar-18 69.0 66.3 59.6 64.3 69.2
May-18 72.4 70.8 62.5 67.4 72.1

Table 4: Household Inflation Expectations – Current, Three Months and One Year Ahead
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.
May-17 7.5 6.3 4.0 8.1 7.3 4.2 9.2 8.5 4.3
Nov-17 7.7 6.3 4.1 8.4 7.5 4.2 8.9 8.6 4.6
Dec-17 7.9 6.7 4.2 8.4 7.5 4.3 8.9 8.5 4.8
Mar-18 8.2 7.2 4.0 8.6 7.8 4.1 8.9 8.6 4.7
May-18 8.7 7.9 4.3 9.4 8.7 4.4 9.7 9.9 5.1

Table 5: Factors that Explain the Total Variability
Survey Period Ended Current Three Months Ahead One Year Ahead
May-17 City, Gender, Category City, Category City, Category
Nov-17 City, Category, Age-Group City, Category City, Category
Dec-17 City, Category, Age-Group, Gender City, Category, Age-Group City, Category
Mar-18 City, Age-Group, Gender City, Category, Age-Group, Gender City, Category
May-18 City, Category, Age-Group City, Category City, Gender, Category

Table 6: Various Group-wise Inflation Expectations: May 2018
  Current Three Months Ahead One Year Ahead
Mean Median Std. Dev. Mean Median Std. Dev. Mean Median Std. Dev.
Overall 8.7 7.9 4.3 9.4 8.7 4.4 9.7 9.9 5.1
Gender-wise
Male 8.7 7.9 4.4 9.3 8.7 4.5 9.4 9.4 5.2
Female 8.7 7.9 4.2 9.5 8.8 4.3 10.0 10.2 4.9
Category-wise
Financial Sector Employees 8.3 7.2 4.3 8.8 7.7 4.4 9.1 8.3 5.0
Other Employees 8.7 7.8 4.4 9.3 8.7 4.5 9.7 9.6 5.1
Self Employed 8.9 8.4 4.4 9.5 9.0 4.5 9.5 10.0 5.3
Homemakers 8.8 8.0 4.2 9.5 8.9 4.3 10.0 10.2 4.9
Retired Persons 8.9 8.1 4.7 9.7 9.3 4.8 9.6 9.7 5.4
Daily Workers 8.8 8.3 4.2 9.4 9.0 4.3 9.9 10.3 4.9
Other category 8.0 6.8 3.7 8.6 7.7 3.9 9.0 8.8 4.6
Age Group-wise
Up to 25 years 7.9 6.9 4.0 8.6 7.9 4.1 9.2 9.1 4.8
25 to 30 years 8.3 7.7 4.0 9.0 8.5 4.1 9.5 9.7 4.8
30 to 35 years 8.7 8.0 4.2 9.4 8.7 4.4 9.8 10.1 5.1
35 to 40 years 8.7 7.9 4.2 9.4 8.9 4.3 9.8 10.1 5.0
40 to 45 years 9.3 8.7 4.5 9.8 9.4 4.5 9.8 10.2 5.3
45 to 50 years 9.3 8.6 4.6 9.8 9.2 4.6 9.8 10.1 5.2
50 to 55 years 9.1 8.3 4.6 9.7 9.2 4.7 9.9 10.1 5.3
55 to 60 years 9.3 8.4 4.4 10.0 9.5 4.6 9.9 9.7 5.2
60 years and above 9.0 8.3 4.5 9.7 9.3 4.6 9.6 10.0 5.3
City-wise
Ahmedabad 9.7 8.9 4.3 10.6 10.2 4.3 10.9 10.5 4.4
Bengaluru 4.2 3.9 1.9 5.2 4.9 2.3 5.3 5.2 2.8
Bhopal 7.4 5.8 4.7 7.9 6.9 4.6 7.6 8.1 5.4
Bhubaneswar 8.4 8.1 3.6 10.0 10.2 3.8 11.8 12.2 3.8
Chennai 10.9 10.5 4.0 12.2 12.6 4.0 13.4 15.4 3.9
Delhi 8.4 7.7 3.9 9.1 8.5 4.1 9.8 9.5 4.4
Guwahati 10.7 10.8 5.1 9.4 9.3 5.2 9.5 9.9 5.7
Hyderabad 7.8 6.9 3.2 8.5 7.9 3.1 9.8 9.0 3.8
Jaipur 9.4 9.3 4.7 9.8 10.2 4.7 9.6 10.4 5.9
Kolkata 9.7 9.6 4.4 10.3 10.2 4.4 10.6 10.4 4.7
Lucknow 8.5 8.3 3.2 9.6 9.3 3.5 10.2 10.3 4.3
Mumbai 10.1 10.1 4.3 10.6 10.4 4.3 10.4 10.6 5.1
Nagpur 7.6 6.3 3.9 8.0 7.1 4.1 7.3 7.0 5.1
Patna 7.7 6.8 3.7 8.2 7.6 3.9 8.6 8.7 4.6
Thiruvananthapuram 10.0 10.2 4.6 11.2 10.7 4.5 11.5 12.5 5.4
Chandigarh 7.7 6.7 3.9 7.9 7.1 3.9 8.2 7.4 4.3
Ranchi 7.5 6.6 3.5 8.1 7.4 3.7 7.4 7.8 5.0
Raipur 6.2 5.6 2.8 6.8 5.9 3.1 6.3 6.0 4.4

Table 7: Cross-tabulation of Current and Three Months Ahead Inflation Expectations: May 2018
(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 36 1 6 4 1 2 0 0 0 0 0 0 0 0 0 0 0 0 50
1-<2 0 24 15 4 0 1 0 0 0 0 0 0 0 0 0 0 0 0 44
2-<3 0 9 123 50 32 4 2 0 0 0 0 0 1 0 0 0 0 1 222
3-<4 1 2 11 114 69 50 6 0 1 1 2 0 0 0 0 0 0 1 258
4-<5 0 2 10 13 212 74 45 9 3 0 5 0 0 0 0 0 0 0 373
5-<6 0 4 10 16 14 455 130 159 59 6 41 0 2 0 0 2 1 2 901
6-<7 0 1 3 2 3 9 223 91 62 7 11 0 5 0 1 0 1 0 419
7-<8 0 3 2 2 4 8 5 185 105 62 42 2 4 1 0 0 2 0 427
8-<9 0 0 2 2 1 2 1 4 160 73 120 9 14 3 0 1 0 0 392
9-<10 0 0 0 1 3 2 0 1 2 91 52 35 13 3 8 2 1 3 217
10-<11 0 0 1 1 2 20 3 4 11 10 392 54 159 25 11 114 28 3 838
11-<12 0 0 0 0 2 1 0 1 1 0 0 39 15 13 6 10 1 0 89
12-<13 0 1 0 0 1 0 0 1 0 1 2 0 41 20 24 12 5 0 108
13-<14 0 0 1 0 0 0 0 1 0 0 1 0 0 9 5 11 1 0 29
14-<15 0 0 1 0 0 1 0 0 0 1 1 0 1 3 21 7 11 3 50
15-<16 0 1 0 1 0 1 0 2 1 0 7 0 1 1 1 84 97 0 197
>=16 0 0 0 0 1 3 3 2 2 1 14 0 1 0 1 21 612 14 675
Total 37 48 185 210 345 633 418 460 407 253 690 139 257 78 78 264 760 27 5289

Table 8: Cross-tabulation of Current and One Year Ahead Inflation Expectations: May 2018
(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 33 3 5 4 1 2 0 0 0 0 0 0 0 0 0 0 1 1 50
1-<2 10 6 16 8 3 1 0 0 0 0 0 0 0 0 0 0 0 0 44
2-<3 33 2 64 42 49 20 3 1 1 1 4 1 0 0 0 0 1 0 222
3-<4 30 0 2 67 51 60 16 8 3 3 9 0 1 0 0 0 3 5 258
4-<5 51 0 4 6 120 78 47 27 28 3 6 0 2 0 0 0 0 1 373
5-<6 87 2 4 8 14 249 92 149 79 33 122 5 15 2 0 23 11 6 901
6-<7 36 0 1 2 3 2 98 88 72 32 45 10 14 1 2 3 1 9 419
7-<8 31 1 1 4 0 1 6 112 61 60 70 19 32 7 5 13 2 2 427
8-<9 26 0 0 1 0 1 2 2 87 42 107 32 56 7 4 18 5 2 392
9-<10 10 0 0 0 0 0 0 0 0 67 35 24 23 18 13 9 14 4 217
10-<11 48 0 0 3 0 6 2 2 9 4 254 23 100 31 28 156 165 7 838
11-<12 3 0 0 0 1 1 0 0 1 0 2 22 9 14 7 10 16 3 89
12-<13 5 0 0 0 0 0 0 0 0 0 2 0 21 4 15 38 22 1 108
13-<14 1 0 1 0 0 0 0 0 0 1 0 0 0 5 2 8 11 0 29
14-<15 5 0 0 0 1 0 0 0 1 0 1 0 0 1 15 3 20 3 50
15-<16 14 0 0 0 0 1 0 1 2 0 5 0 3 1 1 46 120 3 197
>=16 43 0 0 0 0 1 1 0 0 0 4 0 2 2 1 15 582 24 675
Total 466 14 98 145 243 423 267 390 344 246 666 136 278 93 93 342 974 71 5289

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


Top