Skip to main content
Click here to Visit the RBI’s new website

BBBPLogo

publications

PDF document (336 kb)
Date : Jun 04, 2020
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the May 2020 round of the Inflation Expectations Survey of Households (IESH)1. In view of the Covid-19 pandemic, the survey was conducted through telephonic interviews during May 5-17, 2020 in 18 major cities. The results are based on responses from 5,761 urban households.

Highlights:

i. Households’ median inflation perception and expectations increased sharply in May 2020 as compared with the March 2020 round of the survey [Charts 1a and 1b].

ii. Inflation expectation over three-month horizon exceeded that for the next year ahead period in quantitative terms [Charts 1a and 1b; Table 3].

iii. Three months and one year ahead median inflation expectations rose by 190 and 120 basis points, respectively, over the previous round [Table 3].

iv. Expecting increasing price pressure on food products, more households expect general prices and inflation to rise over three months horizon as compared to previous round [Table 1a]. However, the prices of all product groups, especially cost of housing, are expected to ease over a year ahead period [Table 1b].


Note: Please see the excel file for time series data.

Table 1(a): Product-wise Expectations of Prices for Three Months ahead
(Percentage of Respondents)
Survey period ended May-19 Nov-19 Jan-20 Mar-20 May-20
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 78.3 1.01 80.7 0.90 83.2 0.87 83.3 0.79 85.3 0.73
Price increase more than current rate 50.0 1.22 52.4 1.22 56.1 1.16 52.5 1.10 56.0 1.02
Price increase similar to current rate 25.6 1.01 23.4 0.96 23.4 0.91 25.6 0.99 23.5 0.89
Price increase less than current rate 2.8 0.32 4.9 0.55 3.6 0.37 5.2 0.56 5.8 0.49
No changes in prices 18.4 0.96 17.3 0.84 14.4 0.81 14.9 0.76 12.4 0.69
Decline in prices 3.3 0.35 1.9 0.26 2.4 0.31 1.8 0.25 2.3 0.32
Food Product                    
Prices will increase 78.5 0.87 81.8 0.80 81.7 0.80 81.9 0.81 84.6 0.75
Price increase more than current rate 48.5 1.13 54.8 1.14 56.0 1.11 55.4 1.02 58.6 1.00
Price increase similar to current rate 24.7 0.94 21.0 0.85 20.1 0.85 20.0 0.88 20.0 0.82
Price increase less than current rate 5.4 0.46 6.0 0.54 5.5 0.45 6.5 0.56 6.0 0.49
No changes in prices 15.0 0.77 12.3 0.65 11.2 0.67 12.4 0.68 10.7 0.64
Decline in prices 6.5 0.47 5.9 0.48 7.2 0.50 5.7 0.43 4.7 0.45
Non- Food Product                    
Prices will increase 75.8 0.91 75.3 0.93 77.8 0.91 77.8 0.87 76.7 0.88
Price increase more than current rate 45.2 1.15 48.0 1.14 51.4 1.15 50.8 1.00 49.5 0.99
Price increase similar to current rate 25.3 0.91 21.1 0.86 21.2 0.88 20.8 0.89 20.8 0.82
Price increase less than current rate 5.4 0.44 6.1 0.53 5.3 0.43 6.2 0.50 6.4 0.50
No changes in prices 18.1 0.81 20.5 0.83 17.7 0.82 17.7 0.79 17.8 0.79
Decline in prices 6.0 0.47 4.3 0.39 4.4 0.39 4.5 0.42 5.5 0.49
Household Durables                    
Prices will increase 61.3 1.12 55.2 1.09 60.3 1.02 64.5 1.02 55.1 1.04
Price increase more than current rate 37.0 1.12 35.4 1.06 37.9 1.03 42.3 1.03 33.6 0.96
Price increase similar to current rate 19.9 0.85 15.2 0.73 17.5 0.76 17.2 0.80 16.4 0.76
Price increase less than current rate 4.3 0.41 4.6 0.44 4.8 0.43 5.0 0.44 5.1 0.44
No changes in prices 27.2 1.01 29.1 0.93 26.8 0.91 24.2 0.90 29.7 0.94
Decline in prices 11.5 0.64 15.8 0.73 12.9 0.65 11.2 0.63 15.2 0.76
Cost of Housing                    
Prices will increase 70.9 1.06 68.5 1.09 69.7 1.04 71.0 1.07 48.6 1.01
Price increase more than current rate 46.9 1.13 48.3 1.19 48.4 1.10 49.5 1.10 30.2 0.93
Price increase similar to current rate 19.8 0.83 16.4 0.77 17.3 0.74 17.4 0.78 13.6 0.69
Price increase less than current rate 4.2 0.39 3.8 0.41 4.0 0.40 4.2 0.39 4.8 0.45
No changes in prices 21.7 0.96 24.0 0.99 22.0 0.95 22.1 0.96 30.3 0.93
Decline in prices 7.3 0.52 7.4 0.53 8.3 0.54 6.9 0.52 21.1 0.83
Cost of Services                    
Prices will increase 68.6 1.03 65.8 1.05 72.5 0.98 70.8 0.99 68.3 0.97
Price increase more than current rate 42.6 1.14 43.6 1.14 46.4 1.13 46.2 1.02 43.2 0.99
Price increase similar to current rate 21.7 0.89 17.7 0.79 21.1 0.81 19.3 0.84 19.3 0.79
Price increase less than current rate 4.3 0.41 4.5 0.46 4.9 0.43 5.2 0.44 5.9 0.46
No changes in prices 27.7 0.99 29.5 1.01 23.4 0.90 25.9 0.94 27.4 0.93
Decline in prices 3.8 0.37 4.7 0.43 4.1 0.38 3.3 0.34 4.4 0.42
Note:
1. The table provides estimates and standard errors for qualitative responses.
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 May-19 Nov-19 Jan-20Mar-20 May-20
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 86.3 0.77 89.1 0.71 88.1 0.74 89.2 0.65 85.6 0.73
Price increase more than current rate 58.5 1.19 64.0 1.25 63.6 1.13 60.7 1.07 57.1 1.00
Price increase similar to current rate 24.9 1.03 21.5 0.96 21.4 0.88 24.8 1.00 23.8 0.88
Price increase less than current rate 3.0 0.32 3.6 0.44 3.2 0.37 3.7 0.42 4.7 0.43
No changes in prices 10.2 0.70 8.9 0.64 9.5 0.67 9.0 0.62 11.9 0.67
Decline in prices 3.5 0.37 2.0 0.28 2.4 0.30 1.8 0.26 2.5 0.33
Food Product                    
Prices will increase 83.1 0.76 86.2 0.74 84.8 0.73 85.6 0.73 77.3 0.86
Price increase more than current rate 50.4 1.19 58.9 1.24 56.0 1.14 55.6 1.10 46.9 1.01
Price increase similar to current rate 27.6 0.97 22.4 0.90 24.3 0.93 24.3 0.93 24.2 0.88
Price increase less than current rate 5.1 0.43 5.0 0.49 4.5 0.40 5.7 0.49 6.3 0.51
No changes in prices 11.4 0.64 9.4 0.61 9.8 0.59 10.3 0.64 15.7 0.74
Decline in prices 5.5 0.43 4.4 0.39 5.4 0.42 4.1 0.37 6.9 0.52
Non- Food Product                    
Prices will increase 81.3 0.81 81.0 0.82 81.6 0.80 82.3 0.81 73.3 0.92
Price increase more than current rate 49.7 1.18 53.5 1.23 53.1 1.14 53.6 1.08 42.6 0.99
Price increase similar to current rate 26.8 0.99 22.6 0.92 23.5 0.88 23.4 0.92 23.9 0.87
Price increase less than current rate 4.9 0.44 4.9 0.51 5.1 0.44 5.3 0.47 6.8 0.51
No changes in prices 13.7 0.72 15.5 0.72 14.1 0.72 14.2 0.73 20.7 0.84
Decline in prices 5.0 0.43 3.6 0.36 4.3 0.39 3.4 0.36 6.0 0.49
Household Durables                    
Prices will increase 68.8 1.04 65.4 1.00 68.0 0.96 70.8 1.02 59.6 1.03
Price increase more than current rate 42.9 1.14 42.7 1.16 44.0 1.10 46.6 1.09 34.8 0.99
Price increase similar to current rate 21.9 0.88 18.1 0.80 20.0 0.80 19.8 0.86 19.1 0.79
Price increase less than current rate 4.0 0.40 4.6 0.46 4.0 0.40 4.4 0.42 5.7 0.47
No changes in prices 21.5 0.91 22.5 0.84 21.2 0.84 19.7 0.87 28.4 0.93
Decline in prices 9.7 0.59 12.1 0.62 10.7 0.60 9.5 0.59 12.1 0.67
Cost of Housing                    
Prices will increase 79.8 0.84 80.0 0.92 77.8 0.89 79.9 0.90 59.7 1.00
Price increase more than current rate 54.3 1.05 57.1 1.20 54.7 1.09 56.5 1.03 36.9 0.98
Price increase similar to current rate 21.9 0.84 19.1 0.85 19.0 0.83 19.6 0.82 17.3 0.77
Price increase less than current rate 3.6 0.37 3.9 0.41 4.1 0.39 3.8 0.39 5.5 0.46
No changes in prices 14.3 0.77 13.9 0.76 15.0 0.77 14.5 0.78 25.1 0.89
Decline in prices 5.9 0.45 6.1 0.48 7.2 0.50 5.5 0.47 15.2 0.73
Cost of Services                    
Prices will increase 80.9 0.83 80.9 0.87 82.5 0.79 81.4 0.85 74.4 0.91
Price increase more than current rate 50.3 1.12 53.7 1.23 54.6 1.15 53.0 1.09 44.6 0.98
Price increase similar to current rate 25.3 0.94 22.3 0.86 23.0 0.87 23.3 0.90 23.1 0.85
Price increase less than current rate 5.3 0.49 4.9 0.51 4.9 0.44 5.0 0.44 6.7 0.50
No changes in prices 15.5 0.77 15.9 0.77 14.6 0.72 16.0 0.81 22.1 0.87
Decline in prices 3.6 0.36 3.2 0.36 2.9 0.33 2.7 0.30 3.5 0.38
Note:
1. The table provides estimates and standard errors for qualitative responses.
2. Constituent items may not add up to the corresponding total, due to rounding off.

Table 2: Inflation Expectations of Various Groups: May 2020
  Current Perception Three Months ahead Expectation One Year ahead Expectation
Mean Median Mean Median Mean Median
Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Overall 9.6 0.09 9.3 0.28 10.6 0.09 10.4 0.06 9.7 0.12 10.2 0.07
Gender-wise                        
Male 9.7 0.11 9.5 0.33 10.6 0.11 10.4 0.08 9.6 0.14 10.2 0.09
Female 9.5 0.14 9.2 0.32 10.6 0.14 10.3 0.09 9.7 0.18 10.2 0.12
Category-wise                        
Financial Sector Employees 9.6 0.39 9.1 0.88 10.6 0.43 10.1 0.62 9.8 0.51 9.7 0.91
Other Employees 9.5 0.16 8.8 0.27 10.6 0.16 10.3 0.11 9.8 0.20 10.2 0.12
Self Employed 9.8 0.16 9.6 0.41 10.6 0.16 10.4 0.11 9.7 0.20 10.2 0.16
Homemaker 9.4 0.16 8.9 0.29 10.5 0.16 10.2 0.10 9.4 0.20 10.0 0.29
Retired Persons 9.8 0.39 9.8 0.66 10.7 0.39 10.5 0.34 9.6 0.45 10.2 0.56
Daily Workers 10.1 0.23 10.0 0.23 11.1 0.22 10.8 0.28 10.2 0.28 10.6 0.20
Other category 9.3 0.23 8.6 0.49 10.3 0.22 10.2 0.14 9.9 0.25 10.3 0.16
Age Group-wise                        
Up to 25 years 9.1 0.17 8.4 0.34 10.4 0.17 10.2 0.12 9.8 0.21 10.2 0.14
25 to 30 years 9.5 0.18 9.1 0.40 10.6 0.17 10.3 0.14 9.9 0.21 10.2 0.19
30 to 35 years 9.3 0.19 8.7 0.37 10.3 0.19 10.2 0.18 9.3 0.23 9.4 0.55
35 to 40 years 9.6 0.18 9.2 0.40 10.6 0.18 10.3 0.12 9.5 0.21 9.9 0.36
40 to 45 years 10.0 0.20 10.0 0.29 10.9 0.19 10.5 0.15 10.2 0.24 10.6 0.16
45 to 50 years 9.7 0.22 9.4 0.45 10.7 0.22 10.4 0.13 9.7 0.26 10.2 0.34
50 to 55 years 9.8 0.28 9.7 0.54 10.6 0.28 10.4 0.20 9.8 0.34 10.2 0.28
55 to 60 years 9.7 0.30 9.3 0.54 10.7 0.28 10.4 0.23 9.6 0.35 10.1 0.36
60 years and above 10.0 0.32 10.1 0.32 11.0 0.32 10.8 0.51 10.2 0.39 10.6 0.39
City-wise                        
Ahmedabad 10.5 0.34 10.3 0.26 11.6 0.33 11.5 0.79 9.8 0.48 10.5 0.68
Bengaluru 9.8 0.28 10.1 0.25 10.6 0.28 10.4 0.24 10.2 0.34 10.5 0.31
Bhopal 11.1 0.64 10.9 1.16 11.7 0.62 12.0 1.68 9.7 0.82 10.8 1.50
Bhubaneswar 8.5 0.79 7.7 1.73 10.3 0.72 9.7 1.40 9.8 0.92 9.3 1.94
Chennai 10.6 0.39 10.4 0.15 11.6 0.35 11.2 0.86 11.5 0.42 12.0 1.33
Delhi 8.2 0.23 6.9 0.50 9.1 0.23 8.2 0.30 8.3 0.27 8.1 0.31
Guwahati 9.6 0.57 9.5 1.30 10.0 0.60 9.6 1.16 8.4 0.94 7.7 1.28
Hyderabad 10.3 0.37 10.3 0.27 12.1 0.34 13.1 1.11 12.0 0.41 14.0 1.11
Jaipur 10.1 0.57 9.9 0.66 10.8 0.52 10.7 0.59 8.7 0.65 9.3 0.99
Kolkata 10.8 0.30 10.4 0.18 11.5 0.29 11.3 0.88 10.9 0.35 10.9 0.62
Lucknow 8.8 0.43 8.8 0.57 9.9 0.49 10.2 0.57 9.7 0.49 10.3 0.31
Mumbai 10.0 0.23 9.0 0.37 10.9 0.23 10.3 0.19 8.8 0.32 9.3 0.61
Nagpur 8.4 0.42 7.9 0.66 10.1 0.47 9.9 0.46 9.2 0.64 9.7 0.72
Patna 9.4 0.50 9.7 0.31 10.9 0.69 11.1 0.69 11.0 0.76 11.6 1.14
Thiruvananthapuram 6.3 0.65 5.2 0.33 8.1 0.82 6.6 0.64 8.5 0.86 7.4 0.79
Chandigarh 8.1 0.54 8.3 0.58 8.0 0.54 8.0 0.69 7.5 0.60 7.9 0.82
Ranchi 7.8 0.53 7.0 0.66 8.7 0.60 8.0 0.88 7.5 0.72 7.2 0.72
Raipur 8.7 0.63 7.9 0.79 10.4 0.63 9.9 0.74 10.2 0.79 10.1 0.72
Note: The table provides estimates and standard errors for quantitative responses.

Table 3: Household Inflation Expectations – Current Perception, Three Months and One Year Ahead Expectations
  Current Perception Three Months ahead Expectation One Year ahead Expectation
Mean Median Mean Median Mean Median
Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
May-19 7.8 0.10 6.6 0.15 8.6 0.10 7.6 0.12 8.4 0.12 8.1 0.16
Nov-19 9.1 0.10 8.2 0.17 9.8 0.11 9.2 0.23 9.7 0.12 9.9 0.19
Jan-20 8.7 0.11 7.6 0.19 9.5 0.11 8.6 0.16 9.3 0.13 9.2 0.25
Mar-20 8.4 0.09 7.6 0.12 9.2 0.10 8.5 0.11 9.1 0.11 9.0 0.18
May-20 9.6 0.09 9.3 0.28 10.6 0.09 10.4 0.06 9.7 0.12 10.2 0.07
Note: The table provides estimates and standard errors for quantitative responses.

Table 4: 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-19 66.4 65.4 56.8 62.0 66.2
Nov-19 64.7 65.1 51.0 60.7 63.1
Jan-20 66.1 66.2 53.4 59.3 64.5
Mar-20 65.4 64.6 55.8 61.1 64.7
May-20 63.3 59.8 46.5 42.6 57.3
One Year Ahead
May-19 71.6 71.3 62.7 70.7 72.5
Nov-19 73.9 70.9 57.8 69.7 72.3
Jan-20 72.2 70.9 60.3 67.8 72.8
Mar-20 71.9 71.8 63.2 69.9 72.3
May-20 62.3 59.5 50.9 50.3 62.3
Note: Figures are based on sample observations

Table 5(a): Cross-tabulation of Number of Respondents by Current Inflation Perception and Three Months Ahead Inflation Expectations: May 2020
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 14 3 5 1 1 4 1 0 0 0 1 0 0 0 0 0 1 0 31
1-<2 0 19 10 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 35
2-<3 0 6 80 56 38 16 6 4 3 0 3 0 1 0 0 0 0 0 213
3-<4 1 2 4 97 40 76 21 7 5 0 3 0 0 0 0 0 0 0 256
4-<5 0 1 4 8 122 68 73 17 9 1 6 0 1 0 0 0 1 1 312
5-<6 5 2 10 26 19 368 99 148 87 12 130 0 6 0 0 15 4 0 931
6-<7 1 1 0 6 4 10 131 56 51 19 26 5 5 0 0 1 0 0 316
7-<8 0 0 2 1 4 8 7 167 50 54 59 6 9 0 3 7 2 0 379
8-<9 1 1 0 0 1 12 8 0 150 36 112 8 24 9 1 9 7 0 379
9-<10 0 0 0 1 0 1 2 0 3 74 39 20 33 6 4 11 2 0 196
10-<11 1 0 0 2 2 42 5 9 18 12 436 35 159 37 8 249 120 1 1136
11-<12 0 0 0 0 0 1 0 0 0 0 0 12 6 7 4 6 4 0 40
12-<13 0 0 0 0 0 0 0 1 1 0 4 1 34 14 11 29 8 0 103
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 6 11 0 21
14-<15 0 0 0 0 0 0 0 0 0 0 1 0 0 0 13 4 11 0 29
15-<16 0 0 0 0 0 2 1 2 0 0 13 1 4 1 0 89 152 0 265
>=16 2 0 2 0 1 7 0 4 0 1 36 0 3 2 0 38 1017 6 1119
Total 25 35 117 204 232 615 354 415 377 209 869 88 285 78 46 464 1340 8 5761
Note: Figures are based on sample observations

Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: May 2020
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 12 6 4 2 1 3 0 0 1 0 1 0 0 0 0 0 1 0 31
1-<2 9 10 4 7 2 3 0 0 0 0 0 0 0 0 0 0 0 0 35
2-<3 18 2 62 42 34 24 12 7 3 0 8 0 0 0 0 0 1 0 213
3-<4 34 0 4 55 34 62 26 12 13 2 11 0 1 0 0 1 1 0 256
4-<5 33 0 7 7 89 47 60 19 26 2 9 1 5 1 0 3 3 0 312
5-<6 121 1 6 10 9 255 65 120 89 20 170 4 18 7 2 21 11 2 931
6-<7 40 0 0 5 4 4 90 40 45 19 42 7 11 1 1 4 3 0 316
7-<8 60 1 2 4 4 3 5 113 48 35 60 2 14 0 11 10 6 1 379
8-<9 57 0 0 1 1 5 3 4 85 30 92 23 35 8 6 13 16 0 379
9-<10 25 0 0 0 0 0 0 2 0 45 31 24 19 10 15 18 7 0 196
10-<11 158 0 0 1 0 22 5 7 9 4 282 33 112 37 20 223 221 2 1136
11-<12 3 0 0 0 0 0 0 0 0 0 0 13 1 4 6 4 9 0 40
12-<13 8 0 0 0 0 0 1 0 1 0 0 1 27 8 16 21 20 0 103
13-<14 0 0 0 0 0 0 0 0 0 0 0 1 0 4 3 4 9 0 21
14-<15 5 0 0 0 0 0 0 0 1 0 1 0 0 0 6 0 16 0 29
15-<16 39 0 0 0 0 1 0 1 0 1 13 2 1 1 0 51 153 2 265
>=16 156 0 0 0 0 7 0 1 1 0 27 0 0 1 1 27 892 6 1119
Total 778 20 89 134 178 436 267 326 322 158 747 111 244 82 87 400 1369 13 5761
Note: Figures are based on sample observations

1 The survey is conducted at bi-monthly intervals by the Reserve Bank of India. It provides directional information on near-term inflationary pressures as expected by the respondents and may reflect their own consumption patterns. Hence, they should be treated as households’ sentiments on inflation.

Top