Today, the Reserve Bank released the results of the July 2019 round of the Inflation Expectations Survey of Households (IESH)1. The survey was conducted in 18 major cities and the results are based on responses from 5,870 urban households.
i. Three months ahead median inflation expectations of households remained unchanged at 7.6 per cent i.e., the same as in the May 2019 round of the survey; one year ahead median inflation expectations moderated by 20 basis points to 7.9 per cent (Chart 1a, 1b, Table 2).
ii. Fewer households expect inflation to rise over the year ahead than in May 2019. (Table 1b).
Table 1(a): Product-wise Expectations of Prices for Three Months ahead |
(Percentage of Respondents) |
Survey period ended | Jun-18 | Dec-18 | Mar-19 | May-19 | Jul-19 |
General | | Estimate | SE | Estimate | SE | Estimate | SE | Estimate | SE |
Prices will increase | 83.8 | 72.9 | 1.04 | 74.8 | 1.02 | 78.3 | 1.01 | 77.9 | 0.95 |
Price increase more than current rate | 50.1 | 46.2 | 1.14 | 44.1 | 1.08 | 50.0 | 1.22 | 49.8 | 1.15 |
Price increase similar to current rate | 26.4 | 23.3 | 0.96 | 26.9 | 0.97 | 25.6 | 1.01 | 24.7 | 0.98 |
Price increase less than current rate | 7.3 | 3.4 | 0.39 | 3.8 | 0.41 | 2.8 | 0.32 | 3.4 | 0.38 |
No changes in prices | 14.6 | 21.2 | 0.98 | 21.9 | 0.98 | 18.4 | 0.96 | 18.5 | 0.88 |
Decline in prices | 1.6 | 5.8 | 0.46 | 3.4 | 0.36 | 3.3 | 0.35 | 3.6 | 0.39 |
Food Product | | | | | | | | | |
Prices will increase | 81.4 | 70.7 | 0.98 | 73.7 | 0.96 | 78.5 | 0.87 | 80.0 | 0.87 |
Price increase more than current rate | 47.8 | 42.7 | 1.08 | 43.6 | 1.06 | 48.5 | 1.13 | 48.5 | 1.09 |
Price increase similar to current rate | 24.8 | 22.4 | 0.87 | 24.1 | 0.88 | 24.7 | 0.94 | 25.7 | 1.01 |
Price increase less than current rate | 8.7 | 5.7 | 0.48 | 6.0 | 0.49 | 5.4 | 0.46 | 5.8 | 0.47 |
No changes in prices | 13.3 | 17.2 | 0.79 | 17.5 | 0.84 | 15.0 | 0.77 | 13.8 | 0.75 |
Decline in prices | 5.3 | 12.0 | 0.65 | 8.8 | 0.56 | 6.5 | 0.47 | 6.2 | 0.52 |
Non- Food Product | | | | | | | | | |
Prices will increase | 78.2 | 67.6 | 1.00 | 71.3 | 0.94 | 75.8 | 0.91 | 73.8 | 0.97 |
Price increase more than current rate | 44.5 | 40.8 | 1.08 | 41.0 | 1.02 | 45.2 | 1.15 | 43.1 | 1.14 |
Price increase similar to current rate | 24.4 | 21.6 | 0.89 | 24.5 | 0.86 | 25.3 | 0.91 | 25.2 | 0.93 |
Price increase less than current rate | 9.3 | 5.3 | 0.47 | 5.7 | 0.48 | 5.4 | 0.44 | 5.5 | 0.46 |
No changes in prices | 17.7 | 20.5 | 0.85 | 21.9 | 0.87 | 18.1 | 0.81 | 20.4 | 0.90 |
Decline in prices | 4.1 | 11.9 | 0.63 | 6.8 | 0.47 | 6.0 | 0.47 | 5.8 | 0.48 |
Household Durables | | | | | | | | | |
Prices will increase | 58.7 | 56.8 | 1.08 | 59.5 | 1.05 | 61.3 | 1.12 | 57.9 | 1.07 |
Price increase more than current rate | 32.6 | 34.8 | 1.08 | 35.2 | 0.99 | 37.0 | 1.12 | 33.7 | 1.05 |
Price increase similar to current rate | 19.1 | 17.9 | 0.85 | 19.3 | 0.79 | 19.9 | 0.85 | 19.6 | 0.81 |
Price increase less than current rate | 7.1 | 4.1 | 0.39 | 5.0 | 0.41 | 4.3 | 0.41 | 4.6 | 0.41 |
No changes in prices | 30.9 | 24.8 | 0.91 | 27.7 | 0.96 | 27.2 | 1.01 | 28.2 | 0.96 |
Decline in prices | 10.4 | 18.4 | 0.77 | 12.8 | 0.62 | 11.5 | 0.64 | 13.9 | 0.67 |
Cost of Housing | | | | | | | | | |
Prices will increase | 71.6 | 69.1 | 1.03 | 68.1 | 0.98 | 70.9 | 1.06 | 68.6 | 1.01 |
Price increase more than current rate | 45.3 | 46.5 | 1.06 | 44.2 | 0.97 | 46.9 | 1.13 | 45.2 | 1.04 |
Price increase similar to current rate | 19.9 | 18.2 | 0.79 | 19.5 | 0.76 | 19.8 | 0.83 | 19.4 | 0.82 |
Price increase less than current rate | 6.4 | 4.5 | 0.41 | 4.4 | 0.41 | 4.2 | 0.39 | 4.0 | 0.38 |
No changes in prices | 20.7 | 22.2 | 0.94 | 22.4 | 0.88 | 21.7 | 0.96 | 22.8 | 0.90 |
Decline in prices | 7.7 | 8.6 | 0.57 | 9.5 | 0.60 | 7.3 | 0.52 | 8.6 | 0.58 |
Cost of Services | | | | | | | | | |
Prices will increase | 70.8 | 65.7 | 1.10 | 66.4 | 1.02 | 68.6 | 1.03 | 66.1 | 1.03 |
Price increase more than current rate | 40.8 | 40.2 | 1.11 | 39.2 | 1.00 | 42.6 | 1.14 | 39.8 | 1.07 |
Price increase similar to current rate | 22.8 | 21.2 | 0.82 | 21.9 | 0.84 | 21.7 | 0.89 | 21.6 | 0.83 |
Price increase less than current rate | 7.3 | 4.3 | 0.41 | 5.3 | 0.45 | 4.3 | 0.41 | 4.7 | 0.42 |
No changes in prices | 26.5 | 28.2 | 1.02 | 28.9 | 0.99 | 27.7 | 0.99 | 28.7 | 0.94 |
Decline in prices | 2.6 | 6.1 | 0.45 | 4.7 | 0.42 | 3.8 | 0.37 | 5.3 | 0.46 |
Note: 1. The table provides estimates and standard errors for qualitative responses from the December 2018 round onwards. For earlier rounds, the results are based on sample proportions. |
2. Constituent items may not add up to the corresponding total, due to rounding off. |
Table 1(b): Product-wise Expectations of Prices for One Year ahead |
(Percentage of Respondents) |
Survey period ended | Jun-18 | Dec-18 | Mar-19 | May-19 | Jul-19 |
General | | Estimate | SE | Estimate | SE | Estimate | SE | Estimate | SE |
Prices will increase | 91.6 | 83.8 | 0.82 | 84.4 | 0.90 | 86.3 | 0.77 | 83.8 | 0.87 |
Price increase more than current rate | 59.8 | 57.5 | 1.15 | 54.6 | 1.08 | 58.5 | 1.19 | 56.8 | 1.15 |
Price increase similar to current rate | 25.8 | 23.3 | 1.00 | 26.6 | 0.93 | 24.9 | 1.03 | 24.1 | 1.01 |
Price increase less than current rate | 6.0 | 3.0 | 0.37 | 3.2 | 0.38 | 3.0 | 0.32 | 2.9 | 0.35 |
No changes in prices | 6.5 | 11.3 | 0.73 | 12.6 | 0.83 | 10.2 | 0.70 | 12.6 | 0.78 |
Decline in prices | 1.9 | 4.9 | 0.43 | 3.0 | 0.33 | 3.5 | 0.37 | 3.6 | 0.40 |
Food Product | | | | | | | | | |
Prices will increase | 85.1 | 80.0 | 0.82 | 80.1 | 0.87 | 83.1 | 0.76 | 81.9 | 0.80 |
Price increase more than current rate | 51.4 | 50.6 | 1.08 | 47.2 | 1.06 | 50.4 | 1.19 | 49.3 | 1.16 |
Price increase similar to current rate | 26.5 | 24.7 | 0.93 | 28.0 | 0.88 | 27.6 | 0.97 | 27.7 | 0.98 |
Price increase less than current rate | 7.1 | 4.7 | 0.43 | 5.0 | 0.44 | 5.1 | 0.43 | 4.8 | 0.42 |
No changes in prices | 9.7 | 12.1 | 0.68 | 14.0 | 0.76 | 11.4 | 0.64 | 12.0 | 0.67 |
Decline in prices | 5.3 | 7.9 | 0.52 | 5.9 | 0.45 | 5.5 | 0.43 | 6.1 | 0.49 |
Non- Food Product | | | | | | | | | |
Prices will increase | 83.3 | 76.4 | 0.92 | 78.2 | 0.89 | 81.3 | 0.81 | 78.1 | 0.89 |
Price increase more than current rate | 49.1 | 47.5 | 1.09 | 45.7 | 1.05 | 49.7 | 1.18 | 46.1 | 1.11 |
Price increase similar to current rate | 26.6 | 24.2 | 0.92 | 27.5 | 0.89 | 26.8 | 0.99 | 27.1 | 0.97 |
Price increase less than current rate | 7.6 | 4.7 | 0.43 | 5.0 | 0.41 | 4.9 | 0.44 | 4.9 | 0.44 |
No changes in prices | 12.7 | 15.8 | 0.78 | 16.9 | 0.80 | 13.7 | 0.72 | 16.6 | 0.80 |
Decline in prices | 4.0 | 7.7 | 0.54 | 5.0 | 0.41 | 5.0 | 0.43 | 5.3 | 0.47 |
Household Durables | | | | | | | | | |
Prices will increase | 70.6 | 66.9 | 1.02 | 68.3 | 0.99 | 68.8 | 1.04 | 66.2 | 1.01 |
Price increase more than current rate | 41.6 | 42.0 | 1.09 | 41.3 | 1.02 | 42.9 | 1.14 | 39.8 | 1.08 |
Price increase similar to current rate | 21.8 | 20.4 | 0.84 | 22.6 | 0.81 | 21.9 | 0.88 | 22.0 | 0.91 |
Price increase less than current rate | 7.2 | 4.5 | 0.40 | 4.4 | 0.41 | 4.0 | 0.40 | 4.3 | 0.39 |
No changes in prices | 21.2 | 20.1 | 0.91 | 21.9 | 0.89 | 21.5 | 0.91 | 23.0 | 0.89 |
Decline in prices | 8.2 | 13.0 | 0.69 | 9.8 | 0.57 | 9.7 | 0.59 | 10.9 | 0.61 |
Cost of Housing | | | | | | | | | |
Prices will increase | 81.0 | 79.6 | 0.85 | 77.6 | 0.86 | 79.8 | 0.84 | 76.9 | 0.89 |
Price increase more than current rate | 53.0 | 55.9 | 1.00 | 51.0 | 1.01 | 54.3 | 1.05 | 52.1 | 1.00 |
Price increase similar to current rate | 21.5 | 19.8 | 0.78 | 22.9 | 0.77 | 21.9 | 0.84 | 21.5 | 0.83 |
Price increase less than current rate | 6.5 | 3.9 | 0.39 | 3.8 | 0.36 | 3.6 | 0.37 | 3.4 | 0.34 |
No changes in prices | 13.3 | 13.7 | 0.74 | 15.2 | 0.75 | 14.3 | 0.77 | 15.3 | 0.75 |
Decline in prices | 5.7 | 6.7 | 0.50 | 7.2 | 0.53 | 5.9 | 0.45 | 7.8 | 0.55 |
Cost of Services | | | | | | | | | |
Prices will increase | 84.1 | 77.9 | 0.88 | 78.8 | 0.87 | 80.9 | 0.83 | 77.1 | 0.93 |
Price increase more than current rate | 49.5 | 49.0 | 1.11 | 47.5 | 1.02 | 50.3 | 1.12 | 47.2 | 1.12 |
Price increase similar to current rate | 26.6 | 24.1 | 0.90 | 26.4 | 0.87 | 25.3 | 0.94 | 25.2 | 0.95 |
Price increase less than current rate | 8.0 | 4.8 | 0.44 | 4.8 | 0.42 | 5.3 | 0.49 | 4.6 | 0.43 |
No changes in prices | 13.7 | 17.1 | 0.82 | 17.4 | 0.81 | 15.5 | 0.77 | 17.8 | 0.82 |
Decline in prices | 2.2 | 5.0 | 0.44 | 3.9 | 0.37 | 3.6 | 0.36 | 5.2 | 0.47 |
Note: 1. The table provides estimates and standard errors for qualitative responses from the December 2018 round onwards. For earlier rounds, the results are based on sample proportions. |
2. Constituent items may not add up to the corresponding total, due to rounding off. |