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Date : Feb 10, 2022
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the January 2022 round of the Inflation Expectations Survey of Households (IESH)1. The survey was conducted during January 2 to 12, 2022 in 18 major cities. The results2 are based on responses from 5,985 urban households3.

Highlights:

  1. Households’ median inflation perceptions for the current period moderated by 70 basis points to 9.7 per cent in January, while the three months and one year ahead median inflation expectations also declined by 170 and 190 basis points, respectively, from the November 2021 round of the survey [Charts 1a and 1b; Table 3(a)].

  2. The share of respondents expecting higher inflation has significantly reduced from November 2021 round of the survey. [Tables 1(a) and 1(b)].

  3. Households expect inflation to be more range bound in the near to medium term as reflected in the reduced gap between their current inflation perceptions and the future inflation expectations [Charts 1a and 1b; Table 3(a)].

  4. Three months ahead expectations for overall prices and inflation were generally aligned to those for food products and cost of services [Table 4].

Chart 1

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 Jan-21 Jul-21 Sep-21 Nov-21 Jan-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 83.7 0.89 85.9 0.79 84.9 0.77 89.3 0.64 85.6 0.69
Price increase more than current rate 56.0 1.26 63.0 1.15 61.5 1.14 67.0 1.17 61.5 1.07
Price increase similar to current rate 22.4 0.95 19.6 0.90 19.9 0.88 19.1 0.94 20.4 0.87
Price increase less than current rate 5.3 0.53 3.3 0.38 3.5 0.40 3.3 0.42 3.7 0.40
No changes in prices 14.3 0.86 11.3 0.70 12.9 0.72 8.2 0.55 12.0 0.64
Decline in prices 1.9 0.30 2.8 0.40 2.2 0.29 2.5 0.30 2.4 0.30
Food Product                    
Prices will increase 80.9 0.95 84.0 0.81 84.8 0.74 86.0 0.70 83.7 0.71
Price increase more than current rate 54.2 1.16 61.0 1.15 61.4 1.08 63.7 1.17 61.0 1.01
Price increase similar to current rate 20.0 0.95 17.6 0.89 18.2 0.80 17.0 0.82 17.0 0.78
Price increase less than current rate 6.7 0.57 5.4 0.53 5.3 0.50 5.2 0.46 5.7 0.47
No changes in prices 13.0 0.82 10.5 0.65 10.8 0.64 8.2 0.52 10.5 0.58
Decline in prices 6.1 0.54 5.5 0.53 4.4 0.40 5.8 0.46 5.7 0.45
Non- Food Product                    
Prices will increase 79.3 0.98 82.6 0.85 82.1 0.82 86.3 0.67 80.5 0.73
Price increase more than current rate 51.6 1.20 59.0 1.17 58.8 1.15 62.7 1.17 55.5 1.02
Price increase similar to current rate 20.9 0.90 18.8 0.92 18.2 0.83 18.7 0.86 19.3 0.80
Price increase less than current rate 6.7 0.56 4.7 0.50 5.1 0.45 4.9 0.48 5.6 0.46
No changes in prices 16.9 0.91 12.3 0.73 13.6 0.73 8.9 0.54 14.1 0.65
Decline in prices 3.8 0.40 5.1 0.51 4.3 0.42 4.7 0.43 5.4 0.43
Household Durables                    
Prices will increase 64.3 1.11 65.6 1.10 67.3 0.97 68.6 0.90 69.9 0.88
Price increase more than current rate 42.5 1.15 45.1 1.19 46.5 1.09 47.8 1.11 48.7 1.03
Price increase similar to current rate 16.8 0.77 16.6 0.86 16.2 0.78 15.9 0.77 16.2 0.70
Price increase less than current rate 5.0 0.49 4.0 0.43 4.6 0.43 4.9 0.44 5.1 0.45
No changes in prices 27.2 1.05 25.3 0.99 25.0 0.87 22.7 0.82 23.1 0.83
Decline in prices 8.4 0.58 9.1 0.66 7.7 0.53 8.7 0.54 6.9 0.45
Cost of Housing                    
Prices will increase 66.1 1.11 64.7 1.13 68.7 0.95 74.3 0.94 71.6 0.88
Price increase more than current rate 45.1 1.20 45.9 1.21 49.6 1.07 55.1 1.16 51.3 1.07
Price increase similar to current rate 16.2 0.79 14.5 0.79 15.1 0.77 15.5 0.78 16.0 0.74
Price increase less than current rate 4.8 0.49 4.2 0.46 4.0 0.42 3.7 0.39 4.2 0.42
No changes in prices 24.6 1.02 23.7 0.99 21.9 0.85 19.0 0.82 21.3 0.81
Decline in prices 9.3 0.66 11.6 0.74 9.4 0.59 6.7 0.51 7.1 0.48
Cost of Services                    
Prices will increase 68.8 1.06 74.3 1.02 73.3 0.93 76.5 0.87 74.3 0.84
Price increase more than current rate 45.7 1.15 52.5 1.19 52.1 1.10 53.9 1.20 51.7 1.06
Price increase similar to current rate 18.5 0.81 17.3 0.83 16.8 0.75 17.6 0.80 18.0 0.80
Price increase less than current rate 4.6 0.50 4.5 0.45 4.4 0.41 5.0 0.49 4.7 0.43
No changes in prices 27.4 1.02 22.0 0.95 23.7 0.90 20.2 0.81 22.4 0.79
Decline in prices 3.8 0.47 3.7 0.43 3.0 0.33 3.2 0.34 3.3 0.34
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 Jan-21 Jul-21 Sep-21 Nov-21 Jan-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 88.0 0.80 86.8 0.78 87.7 0.72 90.5 0.59 89.6 0.59
Price increase more than current rate 62.9 1.23 65.6 1.18 66.5 1.10 70.6 1.16 68.4 1.05
Price increase similar to current rate 21.2 0.95 18.3 0.93 18.0 0.85 16.6 0.92 18.0 0.82
Price increase less than current rate 3.9 0.43 2.9 0.38 3.3 0.36 3.3 0.39 3.3 0.39
No changes in prices 9.6 0.75 10.1 0.68 9.3 0.61 6.4 0.46 7.8 0.50
Decline in prices 2.4 0.33 3.1 0.41 2.9 0.36 3.1 0.35 2.6 0.29
Food Product                    
Prices will increase 80.5 0.96 80.8 0.87 81.6 0.79 84.5 0.74 83.8 0.72
Price increase more than current rate 53.0 1.21 55.9 1.18 57.4 1.12 60.3 1.21 58.3 1.07
Price increase similar to current rate 22.6 0.96 20.7 0.98 19.5 0.89 19.9 0.92 20.3 0.86
Price increase less than current rate 4.9 0.49 4.2 0.45 4.7 0.45 4.4 0.42 5.2 0.45
No changes in prices 13.4 0.84 12.6 0.73 11.9 0.66 9.5 0.58 11.0 0.61
Decline in prices 6.1 0.55 6.6 0.54 6.5 0.47 6.0 0.47 5.2 0.40
Non- Food Product                    
Prices will increase 80.4 0.93 80.3 0.91 81.5 0.81 85.1 0.72 83.0 0.73
Price increase more than current rate 52.8 1.22 56.8 1.21 57.9 1.13 61.8 1.20 57.6 1.09
Price increase similar to current rate 22.7 0.93 19.0 0.91 19.5 0.85 18.9 0.87 20.5 0.86
Price increase less than current rate 4.9 0.45 4.6 0.48 4.1 0.40 4.4 0.46 5.0 0.44
No changes in prices 15.0 0.84 13.4 0.76 13.2 0.71 9.6 0.57 12.1 0.61
Decline in prices 4.6 0.46 6.2 0.57 5.3 0.42 5.4 0.44 4.9 0.41
Household Durables                    
Prices will increase 69.8 1.07 69.1 1.06 71.5 0.98 75.0 0.88 75.4 0.87
Price increase more than current rate 45.0 1.20 47.0 1.18 49.4 1.10 52.4 1.17 52.2 1.07
Price increase similar to current rate 19.9 0.81 18.3 0.88 17.5 0.83 18.1 0.86 18.6 0.81
Price increase less than current rate 4.9 0.48 3.8 0.41 4.5 0.45 4.5 0.45 4.6 0.45
No changes in prices 22.1 0.97 22.7 0.97 22.3 0.89 18.0 0.75 18.6 0.78
Decline in prices 8.1 0.63 8.2 0.62 6.2 0.47 6.9 0.48 6.0 0.44
Cost of Housing                    
Prices will increase 74.8 1.05 71.8 1.08 76.5 0.87 82.4 0.78 79.4 0.79
Price increase more than current rate 49.9 1.22 50.9 1.21 55.2 1.09 60.6 1.16 57.1 1.03
Price increase similar to current rate 20.2 0.91 16.6 0.87 16.8 0.81 17.8 0.86 18.0 0.79
Price increase less than current rate 4.7 0.48 4.2 0.44 4.5 0.43 3.9 0.40 4.3 0.43
No changes in prices 17.7 0.95 19.8 0.92 17.3 0.78 12.8 0.67 15.1 0.67
Decline in prices 7.5 0.61 8.4 0.68 6.2 0.47 4.8 0.41 5.6 0.44
Cost of Services                    
Prices will increase 78.5 0.98 80.9 0.88 79.8 0.85 83.6 0.73 82.0 0.75
Price increase more than current rate 51.1 1.21 55.9 1.17 56.7 1.14 59.6 1.21 57.6 1.05
Price increase similar to current rate 22.9 0.96 20.5 0.91 18.8 0.85 19.0 0.89 19.7 0.81
Price increase less than current rate 4.6 0.45 4.5 0.47 4.3 0.43 5.0 0.47 4.6 0.44
No changes in prices 18.2 0.94 15.7 0.80 16.6 0.77 13.4 0.66 15.1 0.68
Decline in prices 3.3 0.41 3.4 0.42 3.6 0.38 3.1 0.34 2.9 0.31
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: Jan-22
  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 9.9 0.10 9.7 0.29 11.1 0.10 10.6 0.08 10.7 0.11 10.7 0.10
Gender-wise                        
Male 10.1 0.13 10.0 0.17 11.2 0.13 10.6 0.10 10.8 0.15 10.7 0.12
Female 9.7 0.15 9.2 0.37 10.9 0.15 10.5 0.10 10.6 0.18 10.7 0.14
Category-wise                        
Financial Sector Employees 9.6 0.50 8.8 0.69 10.5 0.57 10.0 0.77 9.6 0.70 9.8 0.69
Other Employees 9.9 0.19 9.3 0.40 11.1 0.19 10.5 0.14 11.0 0.22 10.8 0.28
Self Employed 10.5 0.21 10.3 0.09 11.4 0.20 10.8 0.17 10.7 0.26 10.9 0.30
Homemaker 9.7 0.17 9.1 0.39 10.9 0.17 10.5 0.12 10.6 0.21 10.7 0.17
Retired Persons 11.0 0.36 10.5 0.31 11.9 0.35 12.7 1.25 11.0 0.40 11.4 1.09
Daily Workers 10.0 0.25 9.8 0.38 11.3 0.24 10.9 0.41 10.9 0.32 11.0 0.49
Other category 9.8 0.28 9.2 0.51 11.1 0.27 10.6 0.22 11.1 0.28 10.9 0.49
Age Group-wise                        
Up to 25 years 9.5 0.20 8.8 0.35 10.9 0.20 10.4 0.15 11.0 0.22 10.8 0.25
25 to 30 years 9.9 0.19 9.7 0.42 11.1 0.20 10.6 0.18 10.9 0.24 10.8 0.30
30 to 35 years 9.7 0.21 9.3 0.41 10.9 0.21 10.4 0.15 10.5 0.26 10.6 0.17
35 to 40 years 10.0 0.21 9.9 0.34 11.0 0.21 10.5 0.13 10.9 0.24 11.0 0.37
40 to 45 years 10.0 0.24 9.6 0.39 11.1 0.23 10.5 0.19 10.5 0.28 10.6 0.20
45 to 50 years 10.1 0.25 9.9 0.39 11.1 0.25 10.6 0.24 10.6 0.31 10.7 0.30
50 to 55 years 10.5 0.29 10.3 0.11 11.5 0.29 11.3 0.65 10.8 0.38 11.4 0.77
55 to 60 years 10.8 0.32 10.4 0.20 11.3 0.31 10.8 0.37 10.5 0.44 11.4 0.76
60 years and above 10.7 0.28 10.3 0.24 11.6 0.26 11.3 0.77 10.7 0.36 10.7 0.37
City-wise                        
Ahmedabad 9.3 0.50 7.8 0.91 10.6 0.50 9.5 0.89 11.0 0.52 10.4 1.33
Bengaluru 10.1 0.28 10.3 0.13 11.6 0.30 11.7 1.03 11.3 0.40 13.0 1.41
Bhopal 9.0 1.04 8.0 1.85 10.2 0.98 9.8 1.49 9.9 0.91 9.8 1.47
Bhubaneswar 8.6 0.51 7.3 0.45 9.8 0.59 8.9 0.68 8.8 0.58 9.5 0.73
Chennai 9.1 0.42 9.3 1.22 11.0 0.40 10.8 0.53 10.7 0.45 11.0 0.85
Delhi 10.1 0.22 10.0 0.30 11.0 0.23 10.6 0.25 10.7 0.27 10.8 0.46
Guwahati 7.2 0.58 7.0 0.69 7.9 0.67 7.8 0.78 8.2 0.72 8.2 0.90
Hyderabad 10.5 0.47 9.9 0.75 12.4 0.43 13.0 1.26 12.0 0.42 14.0 1.21
Jaipur 9.7 0.60 9.4 0.72 10.2 0.55 9.9 0.59 9.0 0.52 9.4 0.68
Kolkata 10.2 0.28 9.8 0.39 11.2 0.26 10.7 0.35 11.1 0.27 11.4 0.68
Lucknow 11.1 0.49 10.5 0.34 11.8 0.50 11.7 0.85 11.4 0.62 12.5 1.37
Mumbai 10.5 0.23 9.6 0.47 11.5 0.23 10.7 0.29 10.5 0.28 10.6 0.26
Nagpur 10.7 0.60 10.3 0.51 12.0 0.63 13.2 1.70 11.8 0.57 13.7 1.59
Patna 9.7 0.59 9.2 0.76 10.3 0.58 10.0 0.68 10.2 0.55 10.0 0.70
Thiruvananthapuram 6.3 0.77 5.3 0.30 7.7 0.65 6.4 0.55 8.9 0.58 8.4 1.07
Chandigarh 9.9 0.89 9.1 0.66 10.5 0.70 10.1 0.38 10.3 0.63 10.3 0.45
Ranchi 7.9 0.30 7.2 0.44 8.2 0.32 7.5 0.41 7.4 0.50 7.6 0.52
Raipur 6.5 0.61 5.6 0.28 6.8 0.77 5.9 0.50 5.8 0.70 5.5 0.55
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
Jan-21 9.1 0.12 8.2 0.17 10.0 0.12 9.3 0.29 9.7 0.13 10.1 0.15
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
Nov-21 10.7 0.11 10.4 0.05 11.9 0.11 12.3 0.28 11.5 0.12 12.6 0.29
Jan-22 9.9 0.10 9.7 0.29 11.1 0.10 10.6 0.08 10.7 0.11 10.7 0.10
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 Household durables Housing Cost of services
Three Months Ahead
Jan-21 63.3 64.3 54.5 55.7 62.8
Jul-21 67.6 69.0 58.4 56.9 65.0
Sep-21 68.9 69.0 59.4 59.9 66.5
Nov-21 69.7 70.4 58.8 63.3 65.5
Jan-22 66.6 65.6 60.2 61.6 65.8
One Year Ahead
Jan-21 68.4 68.6 60.6 63.0 69.0
Jul-21 70.1 71.0 63.3 63.5 71.4
Sep-21 71.4 72.8 64.7 67.0 73.6
Nov-21 73.6 74.7 66.1 70.0 73.1
Jan-22 71.5 72.2 65.0 67.3 72.9
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: Jan-22
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 2 0 1 0 1 2 0 0 0 0 1 0 0 0 0 1 0 0 8
1-<2 1 13 9 5 1 1 1 0 0 1 1 0 0 0 0 0 0 0 33
2-<3 0 11 56 37 37 18 7 2 2 0 0 0 0 0 0 1 0 0 171
3-<4 0 1 6 49 32 44 12 2 3 1 1 0 0 0 0 0 0 0 151
4-<5 0 0 6 9 91 59 31 15 8 3 3 1 1 0 0 0 1 0 228
5-<6 0 2 11 20 21 345 177 212 82 8 146 5 3 1 0 15 2 3 1053
6-<7 0 1 2 7 7 9 125 85 64 29 26 2 9 1 2 3 1 1 374
7-<8 0 0 0 2 1 11 3 157 89 62 75 6 12 1 6 4 2 0 431
8-<9 0 0 0 1 3 4 5 7 177 62 112 21 15 3 6 5 8 0 429
9-<10 0 0 0 0 0 1 3 3 8 94 58 22 22 5 5 6 3 0 230
10-<11 0 1 1 1 2 22 6 7 9 9 383 46 174 52 18 254 137 2 1124
11-<12 0 0 0 0 0 0 0 0 2 0 1 19 5 2 2 2 1 1 35
12-<13 0 0 0 0 0 1 0 0 0 2 7 0 33 12 19 28 15 1 118
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 0 14 4 5 8 0 31
14-<15 0 0 0 0 1 0 0 0 0 0 1 0 0 0 13 2 16 0 33
15-<16 0 0 0 0 0 4 0 0 1 1 7 0 1 1 2 104 156 0 277
>=16 0 0 0 0 1 4 0 0 4 0 20 0 1 0 0 28 1199 2 1259
Total 3 29 92 131 198 525 370 490 449 272 842 122 276 92 77 458 1549 10 5985
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: Jan-22
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 2 0 1 1 0 1 0 0 0 0 2 0 0 0 0 1 0 0 8
1-<2 7 5 7 6 0 1 3 0 0 1 2 0 1 0 0 0 0 0 33
2-<3 26 4 22 22 45 26 7 5 4 1 7 0 1 1 0 0 0 0 171
3-<4 16 0 2 30 19 39 19 3 10 2 5 1 4 0 0 0 1 0 151
4-<5 30 0 4 0 55 43 39 15 19 4 9 0 2 0 0 3 5 0 228
5-<6 117 1 5 7 10 206 114 164 104 31 186 12 18 7 3 41 23 4 1053
6-<7 42 0 0 0 1 1 79 65 73 37 39 5 14 2 3 8 5 0 374
7-<8 36 0 0 0 5 8 4 89 75 58 88 12 21 5 8 9 12 1 431
8-<9 28 0 0 0 2 1 3 4 104 62 122 26 32 13 8 12 12 0 429
9-<10 25 0 0 0 0 0 1 1 3 46 63 20 29 10 5 16 11 0 230
10-<11 111 0 2 0 0 6 1 5 9 10 218 31 129 34 32 251 285 0 1124
11-<12 5 0 0 0 0 0 0 0 0 0 0 9 5 3 4 5 3 1 35
12-<13 9 0 0 0 0 0 0 1 0 1 1 0 26 9 17 33 21 0 118
13-<14 2 0 0 0 0 0 0 0 0 0 0 0 0 6 5 12 6 0 31
14-<15 3 0 0 0 0 0 0 0 0 0 0 0 0 0 11 3 16 0 33
15-<16 28 0 0 1 0 0 0 1 2 0 1 0 2 2 0 61 179 0 277
>=16 141 0 0 0 0 0 1 0 1 0 8 0 0 1 0 18 1088 1 1259
Total 628 10 43 67 137 332 271 353 404 253 751 116 284 93 96 473 1667 7 5985
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 December 8, 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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