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Date : Dec 07, 2022
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the November 2022 round of the Inflation Expectations Survey of Households (IESH)1 2. The survey was conducted during November 2 to 11, 2022 in 19 major cities. The results are based on responses from 6,066 urban households.

Highlights:

  1. Households’ inflation perceptions for the current period declined by 40 basis points (bps), from the previous survey round, to 9.8 per cent in November 2022; the expectations for three months and one year ahead also reduced by 40 bps and 20 bps to 10.4 per cent and 10.8 per cent, respectively [Charts 1a and 1b; Table 3].

  2. Lowering of inflation expectations was broad based across respondent categories for both three months and one year horizons [Table 2].

  3. The current round witnessed a decline in the variation among respondents’ inflation expectations, especially for one year ahead [Table 3].

  4. Among major products/ services, more households expected higher inflation in food products and housing over one year horizon [Table 1(b)].

  5. Household expectations for prices of durable items had relatively lower coherence with their prognosis of movements in overall prices for both three months and one year ahead periods [Table 4].

Chart 1a and Chart 1b

Note: Please see the excel file for time series data.3

Table 1(a): Product-wise Expectations of Prices for Three Months ahead
(Percentage of Respondents)
Survey period ended Nov-21 May-22 Jul-22 Sep-22 Nov-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 89.3 0.64 88.5 0.69 83.1 0.80 85.0 0.77 83.8 0.76
Price increase more than current rate 66.9 1.16 66.1 1.10 58.7 1.21 59.9 1.14 58.5 1.13
Price increase similar to current rate 19.2 0.94 18.9 0.83 21.1 0.97 20.9 0.85 20.8 0.89
Price increase less than current rate 3.3 0.41 3.5 0.37 3.3 0.36 4.2 0.44 4.4 0.43
No changes in prices 8.2 0.55 9.1 0.62 13.7 0.74 12.6 0.70 13.7 0.69
Decline in prices 2.5 0.30 2.3 0.32 3.2 0.38 2.4 0.33 2.5 0.32
Food Product                    
Prices will increase 86.0 0.70 88.4 0.66 83.7 0.77 85.3 0.69 85.0 0.72
Price increase more than current rate 63.6 1.16 65.6 1.04 59.6 1.13 61.9 1.09 62.0 1.04
Price increase similar to current rate 17.2 0.82 17.4 0.78 18.9 0.90 17.4 0.75 17.2 0.76
Price increase less than current rate 5.2 0.46 5.4 0.44 5.2 0.45 6.1 0.49 5.9 0.48
No changes in prices 8.2 0.51 7.1 0.51 10.1 0.64 9.3 0.55 9.9 0.58
Decline in prices 5.9 0.46 4.5 0.43 6.1 0.52 5.4 0.45 5.1 0.44
Non- Food Product                    
Prices will increase 86.3 0.67 87.5 0.70 80.8 0.84 82.3 0.74 81.1 0.77
Price increase more than current rate 62.5 1.17 64.5 1.05 55.7 1.14 55.8 1.08 57.2 1.05
Price increase similar to current rate 18.8 0.85 17.9 0.79 19.8 0.89 20.5 0.79 17.9 0.78
Price increase less than current rate 4.9 0.48 5.1 0.44 5.2 0.45 6.0 0.48 6.0 0.48
No changes in prices 8.9 0.54 8.2 0.54 13.2 0.72 13.1 0.67 14.4 0.70
Decline in prices 4.8 0.43 4.2 0.43 6.0 0.49 4.6 0.42 4.5 0.43
Household Durables                    
Prices will increase 68.6 0.90 74.7 0.93 68.7 0.95 70.2 0.89 68.3 0.93
Price increase more than current rate 47.7 1.11 53.4 1.13 46.6 1.11 48.0 1.03 47.2 1.07
Price increase similar to current rate 16.0 0.77 16.3 0.78 17.3 0.81 16.8 0.70 16.0 0.75
Price increase less than current rate 4.9 0.44 5.1 0.42 4.8 0.44 5.3 0.45 5.1 0.43
No changes in prices 22.7 0.82 19.7 0.82 23.7 0.88 22.8 0.84 24.5 0.87
Decline in prices 8.7 0.54 5.5 0.44 7.6 0.54 7.1 0.50 7.3 0.49
Cost of Housing                    
Prices will increase 74.3 0.94 78.5 0.90 74.8 0.88 75.7 0.92 76.5 0.88
Price increase more than current rate 55.1 1.16 59.4 1.11 54.2 1.10 53.2 1.07 55.4 1.09
Price increase similar to current rate 15.6 0.78 15.4 0.73 16.9 0.77 17.7 0.70 16.8 0.75
Price increase less than current rate 3.7 0.39 3.7 0.35 3.7 0.37 4.8 0.42 4.3 0.41
No changes in prices 19.0 0.82 17.1 0.82 20.3 0.82 20.2 0.88 19.3 0.83
Decline in prices 6.7 0.50 4.3 0.40 4.8 0.44 4.1 0.39 4.2 0.40
Cost of Services                    
Prices will increase 76.5 0.86 78.5 0.88 71.7 0.93 72.2 0.91 70.6 0.89
Price increase more than current rate 53.9 1.19 56.4 1.09 48.6 1.12 49.4 1.10 49.1 1.04
Price increase similar to current rate 17.6 0.80 17.4 0.71 19.0 0.88 17.9 0.75 16.9 0.73
Price increase less than current rate 5.0 0.49 4.8 0.42 4.1 0.41 5.0 0.41 4.5 0.41
No changes in prices 20.2 0.80 18.6 0.82 24.8 0.92 24.7 0.87 26.6 0.88
Decline in prices 3.3 0.34 2.8 0.32 3.4 0.38 3.1 0.36 2.9 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 Nov-21 May-22 Jul-22 Sep-22 Nov-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 90.4 0.59 91.3 0.60 88.4 0.70 90.8 0.59 90.8 0.57
Price increase more than current rate 70.5 1.15 70.8 1.07 66.2 1.23 68.1 1.12 69.5 1.08
Price increase similar to current rate 16.7 0.91 17.3 0.82 19.3 1.00 19.3 0.88 18.2 0.87
Price increase less than current rate 3.3 0.39 3.1 0.36 2.8 0.32 3.5 0.38 3.1 0.34
No changes in prices 6.4 0.46 5.8 0.47 8.1 0.61 6.6 0.49 6.4 0.45
Decline in prices 3.1 0.35 2.8 0.36 3.4 0.41 2.5 0.34 2.8 0.33
Food Product                    
Prices will increase 84.5 0.74 86.7 0.72 83.5 0.76 86.4 0.67 87.1 0.64
Price increase more than current rate 60.2 1.20 62.8 1.10 58.1 1.18 60.5 1.09 62.9 1.07
Price increase similar to current rate 19.9 0.92 19.2 0.82 21.3 0.98 21.0 0.84 19.6 0.83
Price increase less than current rate 4.4 0.42 4.7 0.41 4.1 0.40 4.9 0.42 4.7 0.42
No changes in prices 9.4 0.57 8.1 0.52 10.5 0.65 8.3 0.52 7.8 0.50
Decline in prices 6.1 0.47 5.2 0.48 6.0 0.55 5.3 0.45 5.0 0.41
Non- Food Product                    
Prices will increase 85.1 0.72 87.0 0.72 83.6 0.78 86.0 0.69 85.0 0.71
Price increase more than current rate 61.7 1.20 63.7 1.09 58.9 1.16 59.8 1.09 60.7 1.09
Price increase similar to current rate 19.0 0.87 19.1 0.82 20.8 0.92 20.9 0.83 19.9 0.84
Price increase less than current rate 4.4 0.45 4.3 0.40 3.9 0.38 5.4 0.45 4.5 0.41
No changes in prices 9.5 0.56 8.2 0.54 10.9 0.68 9.5 0.56 10.1 0.58
Decline in prices 5.4 0.43 4.7 0.47 5.4 0.54 4.4 0.41 4.8 0.42
Household Durables                    
Prices will increase 75.0 0.87 78.7 0.84 75.5 0.84 77.7 0.79 77.6 0.84
Price increase more than current rate 52.3 1.16 56.4 1.09 52.2 1.12 54.1 1.06 55.0 1.09
Price increase similar to current rate 18.2 0.85 17.4 0.75 19.3 0.88 18.9 0.79 18.2 0.80
Price increase less than current rate 4.5 0.45 4.9 0.42 4.0 0.39 4.6 0.41 4.3 0.39
No changes in prices 18.0 0.75 15.9 0.72 18.3 0.78 16.4 0.70 16.4 0.72
Decline in prices 7.0 0.48 5.3 0.46 6.1 0.49 6.0 0.45 6.0 0.47
Cost of Housing                    
Prices will increase 82.4 0.77 85.3 0.72 83.4 0.75 85.8 0.67 86.5 0.69
Price increase more than current rate 60.6 1.15 64.2 1.07 61.4 1.14 61.8 1.04 64.4 1.04
Price increase similar to current rate 17.9 0.86 17.2 0.77 18.6 0.87 19.6 0.79 18.5 0.80
Price increase less than current rate 3.9 0.40 4.0 0.38 3.4 0.36 4.5 0.41 3.7 0.38
No changes in prices 12.8 0.67 10.5 0.60 12.4 0.67 10.6 0.58 10.2 0.59
Decline in prices 4.9 0.41 4.1 0.40 4.1 0.42 3.6 0.38 3.3 0.37
Cost of Services                    
Prices will increase 83.6 0.73 84.9 0.78 81.1 0.84 84.2 0.74 84.2 0.74
Price increase more than current rate 59.5 1.20 62.2 1.10 57.4 1.17 58.6 1.08 60.1 1.10
Price increase similar to current rate 19.1 0.88 17.8 0.78 19.9 0.95 21.0 0.81 19.8 0.83
Price increase less than current rate 5.0 0.46 4.9 0.42 3.9 0.39 4.6 0.43 4.3 0.39
No changes in prices 13.3 0.65 12.0 0.67 15.0 0.80 12.9 0.65 12.9 0.67
Decline in prices 3.1 0.34 3.0 0.38 3.8 0.45 2.9 0.37 2.9 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 2: Inflation Expectations of Various Groups: Nov-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 10.0 0.10 9.8 0.23 10.9 0.10 10.4 0.07 10.8 0.11 10.8 0.08
Gender-wise                        
Male 10.1 0.13 10.0 0.13 11.0 0.14 10.5 0.10 10.7 0.16 10.8 0.14
Female 9.8 0.13 9.6 0.33 10.9 0.13 10.4 0.09 10.9 0.16 10.8 0.10
Category-wise                        
Financial Sector Employees 9.9 0.63 9.4 0.81 10.3 0.64 9.4 0.77 10.0 0.68 10.3 0.69
Other Employees 10.0 0.19 10.0 0.25 11.0 0.19 10.5 0.14 10.9 0.22 10.9 0.24
Self Employed 10.3 0.20 10.2 0.11 11.1 0.19 10.6 0.15 10.8 0.23 10.9 0.34
Homemaker 9.8 0.16 9.6 0.33 10.8 0.16 10.4 0.10 10.7 0.19 10.7 0.12
Retired Persons 11.4 0.35 11.2 0.77 12.0 0.34 13.0 1.54 11.1 0.46 12.9 1.16
Daily Workers 9.8 0.29 9.6 0.55 10.7 0.30 10.4 0.17 10.3 0.34 10.7 0.34
Other category 9.5 0.22 8.6 0.26 10.5 0.22 10.2 0.16 10.9 0.24 10.7 0.14
Age Group-wise                        
Up to 25 years 9.0 0.18 8.3 0.21 10.2 0.18 9.7 0.23 10.8 0.20 10.5 0.14
25 to 30 years 9.5 0.19 8.9 0.27 10.5 0.20 10.2 0.16 10.5 0.24 10.6 0.16
30 to 35 years 9.8 0.22 9.5 0.40 10.7 0.21 10.4 0.16 10.7 0.25 10.8 0.26
35 to 40 years 10.1 0.21 10.0 0.26 10.9 0.21 10.6 0.14 10.8 0.25 11.0 0.36
40 to 45 years 10.7 0.22 10.3 0.10 11.5 0.22 11.1 0.42 11.2 0.27 11.7 0.58
45 to 50 years 10.2 0.23 10.0 0.31 11.0 0.23 10.5 0.16 10.6 0.28 10.7 0.19
50 to 55 years 10.5 0.32 10.2 0.20 11.2 0.32 10.9 0.39 10.8 0.37 11.3 0.67
55 to 60 years 11.3 0.30 10.8 0.43 12.0 0.30 12.5 1.28 11.1 0.37 11.8 0.95
60 years and above 11.0 0.29 10.5 0.17 11.7 0.28 11.6 0.75 11.0 0.37 11.8 0.77
City-wise                        
Ahmedabad 9.0 0.48 7.9 0.50 10.1 0.51 9.0 0.72 10.0 0.54 9.2 0.75
Bengaluru 9.7 0.30 10.0 0.40 10.8 0.27 10.6 0.23 10.9 0.33 11.4 0.79
Bhopal 8.6 0.95 7.2 1.54 9.8 0.86 9.5 1.28 9.4 0.79 9.4 1.13
Bhubaneswar 8.7 0.79 8.3 1.57 10.2 0.66 9.8 0.84 10.4 0.62 10.5 0.73
Chennai 9.6 0.37 9.9 0.60 11.1 0.36 11.0 0.52 11.8 0.34 12.7 1.31
Delhi 10.9 0.25 10.4 0.11 11.8 0.24 11.5 0.65 11.4 0.25 11.7 0.62
Guwahati 8.2 0.33 7.8 0.46 8.6 0.46 8.2 0.69 9.0 0.93 8.9 0.95
Hyderabad 9.5 0.33 9.0 0.68 10.5 0.39 10.1 0.48 10.8 0.59 11.8 0.96
Jaipur 8.0 0.35 7.8 0.32 8.3 0.40 8.2 0.45 7.7 0.42 7.9 0.38
Jammu 11.1 0.68 10.5 0.36 9.9 0.57 9.8 0.91 8.5 0.84 9.5 1.52
Kolkata 11.0 0.30 10.4 0.21 11.9 0.29 12.0 0.79 11.9 0.33 12.7 1.04
Lucknow 10.1 0.58 9.4 0.72 10.5 0.48 10.2 0.49 10.6 0.62 10.9 0.67
Mumbai 10.2 0.22 9.3 0.35 11.1 0.23 10.4 0.16 10.6 0.27 10.7 0.19
Nagpur 10.1 0.47 9.6 0.60 11.5 0.57 11.5 1.20 10.8 0.57 11.4 0.89
Patna 8.3 0.55 7.7 0.68 8.8 0.68 8.1 0.70 8.2 0.57 7.7 0.73
Thiruvananthapuram 6.3 0.65 5.5 0.44 7.7 0.73 7.0 0.76 9.3 0.95 9.0 1.09
Chandigarh 12.3 0.51 13.1 1.96 12.1 0.52 13.1 1.44 12.1 0.63 14.2 1.39
Ranchi 9.0 0.49 8.6 0.50 9.4 0.43 8.9 0.44 9.2 0.46 9.6 0.48
Raipur 8.3 0.44 7.8 0.93 9.1 0.51 9.0 0.67 9.5 1.06 10.1 1.34
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
Nov-21 10.7 0.11 10.4 0.05 11.9 0.11 12.3 0.27 11.5 0.12 12.7 0.27
May-22 10.3 0.11 10.1 0.08 11.4 0.11 10.8 0.11 11.1 0.12 11.1 0.27
Jul-22 9.8 0.10 9.3 0.24 10.7 0.11 10.3 0.08 10.3 0.13 10.5 0.08
Sep-22 10.4 0.10 10.2 0.05 11.3 0.10 10.8 0.09 11.1 0.12 11.0 0.23
Nov-22 10.0 0.10 9.8 0.23 10.9 0.10 10.4 0.07 10.8 0.11 10.8 0.08
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
Nov-21 69.8 70.5 59.0 63.4 65.7
May-22 70.8 71.3 64.0 66.6 69.3
Jul-22 66.9 67.8 62.3 63.7 66.9
Sep-22 67.1 66.9 61.1 62.0 66.6
Nov-22 66.6 67.1 60.2 64.7 66.0
One Year Ahead
Nov-21 73.8 74.8 66.2 70.4 73.2
May-22 75.6 76.6 69.8 73.4 76.2
Jul-22 74.3 75.5 69.2 73.2 75.8
Sep-22 73.8 74.3 67.7 71.7 74.6
Nov-22 74.4 74.8 68.6 73.7 75.0
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: Nov-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 6 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7
1-<2 1 8 12 3 1 1 0 1 0 0 0 0 0 1 0 0 0 0 28
2-<3 0 5 62 39 18 6 0 0 1 0 0 0 1 0 0 0 0 0 132
3-<4 0 2 8 56 49 46 9 1 1 0 1 0 0 0 0 0 0 0 173
4-<5 0 1 5 8 70 57 31 7 7 2 2 0 1 0 0 0 0 0 191
5-<6 0 3 9 26 28 329 125 193 90 7 109 0 4 0 0 13 1 0 937
6-<7 0 0 2 10 6 12 143 80 79 24 18 1 4 0 0 0 0 0 379
7-<8 0 1 1 4 8 11 8 199 132 63 39 8 9 1 1 3 7 0 495
8-<9 0 0 1 2 5 8 7 9 193 93 154 16 20 5 2 3 2 0 520
9-<10 0 0 0 0 3 2 0 6 3 99 71 22 24 4 2 5 1 0 242
10-<11 0 0 1 0 3 40 4 11 14 13 455 75 232 52 11 249 103 1 1264
11-<12 0 0 0 0 0 1 0 0 0 1 2 18 10 6 3 8 6 0 55
12-<13 0 0 0 0 0 3 0 1 1 1 1 1 46 11 20 33 11 0 129
13-<14 0 0 0 0 0 2 0 0 0 0 0 0 0 8 1 6 5 0 22
14-<15 0 0 0 0 0 0 0 0 1 0 0 0 0 0 10 2 11 1 25
15-<16 0 0 0 1 3 8 1 1 3 1 4 0 2 0 2 86 176 0 288
>=16 1 1 0 1 3 10 0 2 1 0 24 2 2 0 0 38 1087 7 1179
Total 8 22 101 150 197 536 328 511 526 304 880 143 355 88 52 446 1410 9 6066
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: Nov-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 6 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 7
1-<2 6 5 4 5 2 4 2 0 0 0 0 0 0 0 0 0 0 0 28
2-<3 17 1 37 29 28 12 4 1 0 0 2 0 1 0 0 0 0 0 132
3-<4 14 2 2 27 35 47 27 4 5 1 6 0 2 0 0 1 0 0 173
4-<5 15 0 1 5 40 41 33 20 22 4 5 0 3 0 0 2 0 0 191
5-<6 91 0 4 10 11 183 81 163 99 28 204 6 9 8 2 22 14 2 937
6-<7 31 0 0 1 0 7 70 67 88 26 52 8 10 4 5 7 3 0 379
7-<8 53 0 0 0 3 7 5 99 95 68 101 11 21 6 9 7 9 1 495
8-<9 40 0 0 0 1 3 6 3 101 67 170 35 57 5 8 17 6 1 520
9-<10 15 0 1 0 1 0 2 1 2 56 45 45 44 8 5 13 4 0 242
10-<11 116 0 1 0 0 9 3 8 9 5 239 45 194 37 38 323 235 2 1264
11-<12 6 0 0 0 0 0 0 0 0 2 0 10 7 6 4 7 12 1 55
12-<13 7 0 0 0 0 0 0 0 4 1 1 0 33 11 20 31 21 0 129
13-<14 4 0 0 0 0 0 0 0 0 1 0 0 0 5 2 5 5 0 22
14-<15 2 0 0 0 0 0 0 0 0 0 1 0 0 0 4 3 15 0 25
15-<16 28 0 1 0 1 0 0 1 2 0 2 0 1 2 0 50 200 0 288
>=16 117 0 0 0 0 2 0 2 1 0 8 1 0 0 2 20 1020 6 1179
Total 568 8 51 77 122 315 233 369 428 259 837 161 382 92 99 508 1544 13 6066
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 September 30, 2022.

2 The survey is conducted at bi-monthly intervals by the Reserve Bank and 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. All estimates of inflation expectations are given in the form of medians, unless stated otherwise.

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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