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Date : Oct 08, 2021
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the September 2021 round of the Inflation Expectations Survey of Households (IESH)1. The survey was conducted during August 29 to September 7, 2021 in 18 major cities predominantly through field interviews and around one per cent of the total sample was covered through telephonic interviews due to Covid-19 related restrictions. The results2 are based on responses from 5,958 urban households3.

Highlights:

i. For the third consecutive survey round, households’ median inflation perception for the current period hovered around 10 per cent [Charts 1a and 1b; Table 3].

ii. After increase in three successive rounds, median inflation expectations for three months and one year ahead periods moderated by 50 and 60 basis points, respectively, in September 2021 [Charts 1a and 1b; Table 3].

iii. Over 60 per cent of the respondents expect general inflation to rise in the next quarter as well as over the next one year. Cost of services are expected to ease marginally over both three months and one-year horizons [Tables 1a and 1b].

iv. The overall price and inflation expectations were generally more aligned to those for food products, non-food commodities and cost of services vis-à-vis the price movements in household durables and housing [Table 4].

Chart 1a & Chart 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 Sep-20 Mar-21 May-21 Jul-21 Sep-21
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 81.6 0.78 86.6 0.74 83.7 0.68 85.9 0.79 84.9 0.77
Price increase more than current rate 53.9 1.02 58.4 1.14 58.5 0.91 63.0 1.15 61.5 1.14
Price increase similar to current rate 22.5 0.84 24.1 0.94 21.2 0.76 19.6 0.90 19.9 0.88
Price increase less than current rate 5.2 0.46 4.1 0.50 4.0 0.37 3.3 0.38 3.5 0.40
No changes in prices 15.9 0.74 11.1 0.71 14.0 0.63 11.3 0.70 12.9 0.72
Decline in prices 2.5 0.31 2.3 0.29 2.3 0.30 2.8 0.40 2.2 0.29
Food Product                    
Prices will increase 80.4 0.80 85.2 0.70 84.4 0.72 84.0 0.81 84.8 0.74
Price increase more than current rate 52.6 1.00 61.2 1.01 60.2 0.92 61.0 1.15 61.4 1.08
Price increase similar to current rate 21.2 0.81 18.1 0.81 19.4 0.75 17.6 0.89 18.2 0.80
Price increase less than current rate 6.6 0.51 6.0 0.55 4.8 0.38 5.4 0.53 5.3 0.50
No changes in prices 14.3 0.70 9.3 0.60 11.8 0.63 10.5 0.65 10.8 0.64
Decline in prices 5.3 0.46 5.5 0.45 3.9 0.39 5.5 0.53 4.4 0.40
Non- Food Product                    
Prices will increase 75.8 0.87 81.0 0.78 78.6 0.79 82.6 0.85 82.1 0.82
Price increase more than current rate 47.3 0.99 57.0 1.00 53.1 0.95 59.0 1.17 58.8 1.15
Price increase similar to current rate 21.9 0.82 19.4 0.77 19.8 0.75 18.8 0.92 18.2 0.83
Price increase less than current rate 6.6 0.50 4.7 0.43 5.6 0.44 4.7 0.50 5.1 0.45
No changes in prices 19.2 0.80 12.9 0.69 17.1 0.72 12.3 0.73 13.6 0.73
Decline in prices 5.0 0.45 6.2 0.48 4.3 0.42 5.1 0.51 4.3 0.42
Household Durables                    
Prices will increase 56.3 1.02 68.1 0.92 58.8 0.96 65.6 1.10 67.3 0.97
Price increase more than current rate 35.0 0.96 46.0 0.98 37.7 0.94 45.1 1.19 46.5 1.09
Price increase similar to current rate 15.8 0.74 17.7 0.74 16.4 0.70 16.6 0.86 16.2 0.78
Price increase less than current rate 5.5 0.47 4.4 0.44 4.7 0.40 4.0 0.43 4.6 0.43
No changes in prices 30.7 0.94 24.6 0.84 32.2 0.90 25.3 0.99 25.0 0.87
Decline in prices 13.1 0.69 7.3 0.50 9.0 0.56 9.1 0.66 7.7 0.53
Cost of Housing                    
Prices will increase 51.8 0.98 68.9 0.93 54.9 0.94 64.7 1.13 68.7 0.95
Price increase more than current rate 32.8 0.93 48.4 1.03 36.5 0.92 45.9 1.21 49.6 1.07
Price increase similar to current rate 14.4 0.69 16.7 0.75 14.4 0.67 14.5 0.79 15.1 0.77
Price increase less than current rate 4.6 0.43 3.8 0.40 3.9 0.36 4.2 0.46 4.0 0.42
No changes in prices 29.1 0.91 22.2 0.86 30.5 0.89 23.7 0.99 21.9 0.85
Decline in prices 19.1 0.78 8.9 0.54 14.6 0.69 11.6 0.74 9.4 0.59
Cost of Services                    
Prices will increase 70.3 0.91 75.6 0.90 67.6 0.89 74.3 1.02 73.3 0.93
Price increase more than current rate 45.5 1.01 51.6 1.02 44.6 0.94 52.5 1.19 52.1 1.10
Price increase similar to current rate 19.1 0.79 19.4 0.79 18.0 0.71 17.3 0.83 16.8 0.75
Price increase less than current rate 5.7 0.47 4.5 0.44 5.0 0.40 4.5 0.45 4.4 0.41
No changes in prices 25.8 0.88 20.8 0.84 29.2 0.87 22.0 0.95 23.7 0.90
Decline in prices 3.9 0.38 3.6 0.36 3.2 0.35 3.7 0.43 3.0 0.33
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 Sep-20 Mar-21 May-21 Jul-21 Sep-21
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 84.8 0.73 88.7 0.61 86.9 0.65 86.8 0.78 87.7 0.72
Price increase more than current rate 59.6 1.00 63.4 1.07 62.4 0.91 65.6 1.18 66.5 1.10
Price increase similar to current rate 20.4 0.82 21.4 0.87 20.3 0.75 18.3 0.93 18.0 0.85
Price increase less than current rate 4.7 0.43 3.8 0.44 4.2 0.38 2.9 0.38 3.3 0.36
No changes in prices 12.1 0.67 8.5 0.54 10.4 0.58 10.1 0.68 9.3 0.61
Decline in prices 3.1 0.35 2.8 0.32 2.7 0.33 3.1 0.41 2.9 0.36
Food Product                    
Prices will increase 77.3 0.85 81.7 0.74 81.7 0.76 80.8 0.87 81.6 0.79
Price increase more than current rate 48.3 0.99 54.6 1.01 53.5 0.95 55.9 1.18 57.4 1.12
Price increase similar to current rate 22.5 0.82 22.2 0.83 22.6 0.77 20.7 0.98 19.5 0.89
Price increase less than current rate 6.4 0.51 4.9 0.46 5.6 0.43 4.2 0.45 4.7 0.45
No changes in prices 14.8 0.72 12.0 0.61 12.5 0.64 12.6 0.73 11.9 0.66
Decline in prices 7.9 0.55 6.3 0.45 5.8 0.46 6.6 0.54 6.5 0.47
Non- Food Product                    
Prices will increase 75.7 0.87 79.9 0.79 79.2 0.78 80.3 0.91 81.5 0.81
Price increase more than current rate 47.3 1.00 54.0 1.02 51.8 0.96 56.8 1.21 57.9 1.13
Price increase similar to current rate 22.2 0.83 21.4 0.83 21.8 0.76 19.0 0.91 19.5 0.85
Price increase less than current rate 6.1 0.49 4.6 0.44 5.7 0.44 4.6 0.48 4.1 0.40
No changes in prices 18.2 0.78 13.4 0.66 15.8 0.70 13.4 0.76 13.2 0.71
Decline in prices 6.1 0.49 6.6 0.47 5.0 0.44 6.2 0.57 5.3 0.42
Household Durables                    
Prices will increase 62.3 0.98 70.3 0.90 64.7 0.94 69.1 1.06 71.5 0.98
Price increase more than current rate 38.8 0.98 47.2 0.98 41.2 0.94 47.0 1.18 49.4 1.10
Price increase similar to current rate 18.4 0.77 18.8 0.74 18.6 0.72 18.3 0.88 17.5 0.83
Price increase less than current rate 5.1 0.45 4.4 0.42 4.9 0.39 3.8 0.41 4.5 0.45
No changes in prices 26.5 0.88 22.7 0.81 26.7 0.86 22.7 0.97 22.3 0.89
Decline in prices 11.2 0.64 6.9 0.48 8.6 0.55 8.2 0.62 6.2 0.47
Cost of Housing                    
Prices will increase 63.9 0.95 75.7 0.86 65.4 0.93 71.8 1.08 76.5 0.87
Price increase more than current rate 42.0 0.99 53.8 1.04 43.5 0.97 50.9 1.21 55.2 1.09
Price increase similar to current rate 17.4 0.75 18.3 0.79 17.5 0.71 16.6 0.87 16.8 0.81
Price increase less than current rate 4.6 0.43 3.6 0.38 4.5 0.40 4.2 0.44 4.5 0.43
No changes in prices 23.8 0.85 17.8 0.76 23.3 0.83 19.8 0.92 17.3 0.78
Decline in prices 12.2 0.67 6.5 0.48 11.2 0.62 8.4 0.68 6.2 0.47
Cost of Services                    
Prices will increase 76.8 0.86 81.4 0.75 76.5 0.82 80.9 0.88 79.8 0.85
Price increase more than current rate 48.5 1.01 55.2 1.02 50.0 0.94 55.9 1.17 56.7 1.14
Price increase similar to current rate 22.0 0.83 21.5 0.82 21.3 0.75 20.5 0.91 18.8 0.85
Price increase less than current rate 6.3 0.50 4.7 0.44 5.2 0.43 4.5 0.47 4.3 0.43
No changes in prices 19.6 0.81 15.2 0.67 20.1 0.77 15.7 0.80 16.6 0.77
Decline in prices 3.6 0.37 3.4 0.35 3.4 0.36 3.4 0.42 3.6 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: Sep-21
  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 10.4 0.11 10.2 0.06 11.4 0.11 10.8 0.10 10.8 0.13 10.9 0.16
Gender-wise                        
Male 10.8 0.14 10.4 0.07 11.7 0.13 11.5 0.48 11.0 0.16 11.5 0.50
Female 10.0 0.16 9.8 0.32 11.3 0.15 10.7 0.11 10.6 0.18 10.7 0.11
Category-wise                        
Financial Sector Employees 10.4 0.56 9.5 0.80 11.6 0.57 11.5 1.23 10.4 0.77 10.2 1.48
Other Employees 10.5 0.19 10.3 0.10 11.5 0.20 11.0 0.27 11.0 0.23 11.2 0.46
Self Employed 10.9 0.22 10.4 0.11 11.8 0.21 11.7 0.61 10.8 0.26 11.2 0.56
Homemaker 9.9 0.19 9.5 0.39 11.1 0.18 10.6 0.11 10.4 0.22 10.6 0.11
Retired Persons 11.4 0.34 10.8 0.33 12.3 0.34 13.9 1.18 11.5 0.41 13.3 1.18
Daily Workers 10.8 0.26 10.3 0.17 11.8 0.25 11.7 0.65 11.4 0.29 12.1 0.78
Other category 9.7 0.24 9.2 0.52 11.1 0.24 10.5 0.18 10.6 0.29 10.9 0.42
Age Group-wise                        
Up to 25 years 9.3 0.20 8.5 0.24 10.6 0.20 10.2 0.19 10.2 0.24 10.4 0.15
25 to 30 years 10.2 0.20 9.9 0.32 11.2 0.20 10.6 0.17 10.5 0.26 10.6 0.16
30 to 35 years 10.1 0.21 10.0 0.24 11.1 0.21 10.5 0.12 10.7 0.26 10.7 0.25
35 to 40 years 10.5 0.22 10.2 0.15 11.6 0.21 11.1 0.45 10.9 0.27 11.0 0.47
40 to 45 years 10.9 0.23 10.5 0.09 11.9 0.22 11.9 0.61 11.3 0.29 12.0 0.65
45 to 50 years 11.0 0.23 10.5 0.12 12.0 0.24 12.2 0.64 11.3 0.30 12.5 0.89
50 to 55 years 10.9 0.32 10.5 0.11 12.0 0.31 13.0 1.24 10.9 0.41 11.7 0.98
55 to 60 years 11.0 0.31 10.6 0.20 12.0 0.30 12.7 1.04 11.1 0.41 12.2 0.81
60 years and above 11.3 0.31 10.7 0.36 12.1 0.30 13.3 1.42 11.3 0.39 13.0 1.22
City-wise                        
Ahmedabad 11.2 0.63 10.8 1.34 12.3 0.60 13.1 1.97 11.8 0.60 13.3 1.91
Bengaluru 10.0 0.32 10.0 0.49 11.2 0.33 11.1 0.72 11.1 0.39 12.3 1.45
Bhopal 8.8 0.66 8.1 1.65 10.2 0.69 10.1 1.14 9.8 0.65 10.1 1.05
Bhubaneswar 9.5 0.57 9.0 1.32 10.2 0.51 10.0 0.74 8.1 1.11 8.8 1.77
Chennai 10.5 0.39 10.4 0.15 11.8 0.36 11.8 1.28 11.7 0.44 13.6 1.51
Delhi 10.8 0.23 10.4 0.10 11.9 0.23 11.9 0.73 11.2 0.28 12.0 0.89
Guwahati 8.5 0.58 7.7 0.59 8.9 0.73 8.3 0.66 8.5 1.09 8.9 1.16
Hyderabad 11.3 0.52 11.0 1.01 12.7 0.47 15.4 0.84 11.0 0.54 14.0 1.52
Jaipur 9.2 0.29 9.3 0.35 10.0 0.40 10.0 0.36 9.9 0.36 10.2 0.30
Kolkata 10.4 0.29 10.0 0.26 11.5 0.28 11.1 0.47 11.5 0.27 11.7 0.57
Lucknow 10.7 0.53 9.8 0.81 11.1 0.49 10.4 0.68 10.0 0.60 10.2 0.58
Mumbai 10.9 0.34 10.2 0.35 11.7 0.32 11.2 0.72 10.1 0.43 10.5 0.48
Nagpur 9.0 0.53 7.8 0.93 10.6 0.53 9.7 1.09 10.1 0.61 9.7 0.75
Patna 9.6 0.61 8.9 0.60 10.2 0.65 9.7 0.77 10.2 0.67 9.8 0.78
Thiruvananthapuram 6.0 0.53 5.2 0.36 7.7 0.55 6.4 0.69 8.8 0.65 8.5 1.06
Chandigarh 9.4 0.63 9.0 0.86 9.1 0.59 8.9 0.54 8.8 0.87 8.7 0.76
Ranchi 8.2 0.29 8.1 0.36 8.6 0.31 8.7 0.47 7.7 0.52 8.4 0.89
Raipur 7.1 0.37 6.8 0.25 8.6 0.42 8.0 0.30 11.4 0.89 11.5 0.96
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
Sep-20 9.9 0.10 9.8 0.25 10.8 0.10 10.4 0.07 9.9 0.12 10.3 0.08
Mar-21 9.4 0.11 8.7 0.16 10.4 0.11 10.1 0.11 10.0 0.12 10.2 0.09
May-21 10.4 0.09 10.2 0.04 11.4 0.09 10.8 0.07 10.7 0.11 10.9 0.12
Jul-21 10.5 0.11 10.3 0.06 11.7 0.11 11.3 0.42 11.0 0.13 11.5 0.49
Sep-21 10.4 0.11 10.2 0.06 11.4 0.11 10.8 0.10 10.8 0.13 10.9 0.16
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
Sep-20 62.1 61.0 50.4 45.9 60.5
Mar-21 67.0 65.7 57.4 58.6 65.1
May-21 68.0 65.1 51.8 50.3 60.5
Jul-21 67.6 69.0 58.4 56.9 65.0
Sep-21 68.9 69.0 59.4 59.9 66.5
One Year Ahead
Sep-20 63.0 64.8 55.5 53.6 66.6
Mar-21 69.6 70.1 62.4 65.5 71.6
May-21 68.3 67.1 57.7 57.1 67.2
Jul-21 70.1 71.0 63.3 63.5 71.4
Sep-21 71.4 72.8 64.7 67.0 73.6
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: Sep-21
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 3 2 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 7
1-<2 1 15 15 4 0 3 0 0 0 0 0 0 0 0 0 0 0 0 38
2-<3 0 9 44 38 23 15 3 1 0 0 0 0 0 0 0 0 1 0 134
3-<4 0 1 9 68 28 40 11 2 4 0 3 0 0 0 0 0 0 0 166
4-<5 0 1 3 7 72 63 33 10 11 0 6 0 1 0 0 0 1 0 208
5-<6 0 3 5 16 23 320 122 166 91 9 100 0 2 0 0 15 1 0 873
6-<7 1 0 0 3 5 1 107 61 84 23 24 2 2 0 1 0 2 0 316
7-<8 0 1 0 1 3 7 4 171 87 74 62 8 5 2 3 1 3 0 432
8-<9 1 0 1 0 2 2 4 2 166 76 142 20 15 2 2 2 3 0 440
9-<10 0 0 0 0 1 2 1 3 5 85 52 33 22 6 5 4 2 1 222
10-<11 0 0 3 0 0 21 5 7 23 12 388 58 164 48 15 264 150 1 1159
11-<12 0 0 0 0 0 0 0 0 0 0 2 16 15 11 2 10 4 0 60
12-<13 0 0 0 0 0 0 0 0 1 0 3 0 41 6 18 23 17 0 109
13-<14 0 0 0 0 0 0 0 0 0 0 0 1 0 11 5 14 5 0 36
14-<15 0 0 0 0 0 0 0 0 0 0 0 0 0 2 17 6 12 0 37
15-<16 0 0 0 1 2 2 0 0 0 0 9 0 3 2 1 87 173 0 280
>=16 0 0 0 0 0 8 0 1 0 0 21 0 2 0 1 17 1380 11 1441
Total 6 32 81 138 159 485 290 424 472 279 812 138 272 90 70 443 1754 13 5958
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: Sep-21
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 3 0 2 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 7
1-<2 8 10 7 7 2 3 1 0 0 0 0 0 0 0 0 0 0 0 38
2-<3 21 1 22 21 31 18 8 0 7 1 2 0 1 0 0 0 1 0 134
3-<4 28 0 4 30 23 43 14 2 8 4 8 0 0 0 0 1 1 0 166
4-<5 24 0 1 3 34 44 39 15 18 3 16 0 5 0 1 2 3 0 208
5-<6 109 0 6 6 6 179 73 139 86 24 170 8 10 2 4 30 21 0 873
6-<7 43 0 0 0 1 1 59 34 70 28 48 1 13 3 3 7 5 0 316
7-<8 50 0 0 0 1 5 3 97 62 63 88 12 20 2 8 12 9 0 432
8-<9 47 0 0 0 1 0 5 3 99 50 142 21 33 7 4 15 13 0 440
9-<10 17 0 0 0 0 0 2 2 1 62 45 27 34 8 4 14 6 0 222
10-<11 134 0 0 1 0 9 2 6 18 10 230 36 127 39 19 250 276 2 1159
11-<12 4 0 0 0 0 0 0 0 1 0 1 11 12 5 5 13 8 0 60
12-<13 12 0 0 0 0 0 0 0 0 0 3 0 28 4 10 27 25 0 109
13-<14 3 0 0 0 0 0 0 0 0 0 0 0 0 11 3 10 9 0 36
14-<15 5 0 0 0 0 0 0 0 0 0 1 0 1 1 8 6 15 0 37
15-<16 20 0 0 0 0 0 0 0 0 0 6 0 2 3 0 58 190 1 280
>=16 199 0 0 0 0 4 0 1 0 0 13 0 0 1 1 19 1196 7 1441
Total 727 11 42 69 100 306 206 299 370 245 773 116 286 86 70 464 1778 10 5958
Note: Figures are based on sample observations

1 The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on August 06, 2021.

2 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.

3 Unit-level data for previous rounds of the survey are available on the Database on Indian Economy (DBIE) portal of the Bank (weblink: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=unitLevelData).

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