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Date : Feb 08, 2023
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of January 2023 round of its bi-monthly Inflation Expectations Survey of Households (IESH)1 2. The survey was conducted during January 2 to 11, 2023 in 19 major cities with responses from 6,024 urban households. Female respondents accounted for 49.7 per cent of this sample. The results are summarised in terms of median.

Highlights:

  1. Households’ inflation perception for the current period moderated by 20 basis points (bps) to 9.6 per cent in January 2023.

  2. Inflation expectation of households rose by 10 bps for three months ahead period whereas their one year ahead expectations remained unchanged from the November 2022 round of the survey [Charts 1a and 1b; Table 3].

  3. Among consumption categories, the proportion of respondents perceiving price rise was highest for the food group for both the horizons, as also witnessed in the previous two survey rounds [Table 1(a) and 1(b)].

  4. Respondents expect higher price pressures for household durables and cost of housing over the next three months, when compared to the previous survey round [Table 1(a)].

  5. City-wise, the range of inflation expectations was 7.4-12.8 per cent over three-month horizon and 8.3-13.3 per cent over one year horizon. [Table 2].

Chart 1a & 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 Jan-22 Jul-22 Sep-22 Nov-22 Jan-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 85.6 0.68 83.1 0.80 85.0 0.77 83.8 0.76 84.3 0.76
Price increase more than current rate 61.4 1.07 58.7 1.21 59.9 1.14 58.5 1.13 60.8 1.14
Price increase similar to current rate 20.5 0.87 21.1 0.97 20.9 0.85 20.8 0.89 20.2 0.86
Price increase less than current rate 3.7 0.40 3.3 0.36 4.2 0.44 4.4 0.43 3.4 0.36
No changes in prices 12.0 0.64 13.7 0.74 12.6 0.70 13.7 0.69 13.3 0.71
Decline in prices 2.4 0.30 3.2 0.38 2.4 0.33 2.5 0.32 2.3 0.30
Food Product                    
Prices will increase 83.7 0.71 83.7 0.77 85.3 0.69 85.0 0.72 84.6 0.72
Price increase more than current rate 61.0 1.01 59.6 1.13 61.9 1.09 62.0 1.04 61.1 1.08
Price increase similar to current rate 17.0 0.78 18.9 0.90 17.4 0.75 17.2 0.76 18.4 0.77
Price increase less than current rate 5.7 0.47 5.2 0.45 6.1 0.49 5.9 0.48 5.1 0.43
No changes in prices 10.5 0.58 10.1 0.64 9.3 0.55 9.9 0.58 10.2 0.59
Decline in prices 5.8 0.45 6.1 0.52 5.4 0.45 5.1 0.44 5.2 0.45
Non- Food Product                    
Prices will increase 80.4 0.73 80.8 0.84 82.3 0.74 81.1 0.77 81.8 0.77
Price increase more than current rate 55.4 1.02 55.7 1.14 55.8 1.08 57.2 1.05 56.4 1.08
Price increase similar to current rate 19.4 0.80 19.8 0.89 20.5 0.79 17.9 0.78 20.5 0.82
Price increase less than current rate 5.6 0.46 5.2 0.45 6.0 0.48 6.0 0.48 4.9 0.44
No changes in prices 14.1 0.64 13.2 0.72 13.1 0.67 14.4 0.70 13.4 0.67
Decline in prices 5.4 0.43 6.0 0.49 4.6 0.42 4.5 0.43 4.7 0.43
Household Durables                    
Prices will increase 69.9 0.88 68.7 0.95 70.2 0.89 68.3 0.93 72.4 0.90
Price increase more than current rate 48.6 1.03 46.6 1.11 48.0 1.03 47.2 1.07 50.3 1.07
Price increase similar to current rate 16.2 0.70 17.3 0.81 16.8 0.70 16.0 0.75 17.5 0.71
Price increase less than current rate 5.1 0.45 4.8 0.44 5.3 0.45 5.1 0.43 4.6 0.42
No changes in prices 23.1 0.82 23.7 0.88 22.8 0.84 24.5 0.87 21.2 0.84
Decline in prices 7.0 0.45 7.6 0.54 7.1 0.50 7.3 0.49 6.3 0.47
Cost of Housing                    
Prices will increase 71.5 0.88 74.8 0.88 75.7 0.92 76.5 0.88 78.0 0.86
Price increase more than current rate 51.3 1.07 54.2 1.10 53.2 1.07 55.4 1.09 58.4 1.08
Price increase similar to current rate 16.1 0.74 16.9 0.77 17.7 0.70 16.8 0.75 16.3 0.73
Price increase less than current rate 4.2 0.42 3.7 0.37 4.8 0.42 4.3 0.41 3.3 0.35
No changes in prices 21.3 0.80 20.3 0.82 20.2 0.88 19.3 0.83 18.9 0.84
Decline in prices 7.2 0.48 4.8 0.44 4.1 0.39 4.2 0.40 3.1 0.34
Cost of Services                    
Prices will increase 74.3 0.83 71.7 0.93 72.2 0.91 70.6 0.89 71.7 0.90
Price increase more than current rate 51.6 1.05 48.6 1.12 49.4 1.10 49.1 1.04 49.9 1.08
Price increase similar to current rate 18.0 0.79 19.0 0.88 17.9 0.75 16.9 0.73 17.6 0.71
Price increase less than current rate 4.6 0.43 4.1 0.41 5.0 0.41 4.5 0.41 4.1 0.40
No changes in prices 22.3 0.78 24.8 0.92 24.7 0.87 26.6 0.88 25.5 0.88
Decline in prices 3.4 0.34 3.4 0.38 3.1 0.36 2.9 0.33 2.7 0.30
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-22 Jul-22 Sep-22 Nov-22 Jan-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 89.6 0.58 88.4 0.70 90.8 0.59 90.8 0.57 91.6 0.53
Price increase more than current rate 68.2 1.05 66.2 1.23 68.1 1.12 69.5 1.08 70.8 1.02
Price increase similar to current rate 18.1 0.81 19.3 1.00 19.3 0.88 18.2 0.87 17.9 0.81
Price increase less than current rate 3.3 0.39 2.8 0.32 3.5 0.38 3.1 0.34 3.0 0.33
No changes in prices 7.8 0.50 8.1 0.61 6.6 0.49 6.4 0.45 5.7 0.43
Decline in prices 2.6 0.29 3.4 0.41 2.5 0.34 2.8 0.33 2.6 0.31
Food Product                    
Prices will increase 83.8 0.71 83.5 0.76 86.4 0.67 87.1 0.64 88.0 0.64
Price increase more than current rate 58.2 1.06 58.1 1.18 60.5 1.09 62.9 1.07 62.7 1.07
Price increase similar to current rate 20.4 0.86 21.3 0.98 21.0 0.84 19.6 0.83 20.7 0.87
Price increase less than current rate 5.2 0.45 4.1 0.40 4.9 0.42 4.7 0.42 4.5 0.42
No changes in prices 10.9 0.61 10.5 0.65 8.3 0.52 7.8 0.50 7.6 0.50
Decline in prices 5.3 0.40 6.0 0.55 5.3 0.45 5.0 0.41 4.4 0.39
Non- Food Product                    
Prices will increase 82.9 0.72 83.6 0.78 86.0 0.69 85.0 0.71 86.7 0.67
Price increase more than current rate 57.5 1.09 58.9 1.16 59.8 1.09 60.7 1.09 62.0 1.09
Price increase similar to current rate 20.5 0.86 20.8 0.92 20.9 0.83 19.9 0.84 20.5 0.83
Price increase less than current rate 4.9 0.44 3.9 0.38 5.4 0.45 4.5 0.41 4.3 0.41
No changes in prices 12.0 0.61 10.9 0.68 9.5 0.56 10.1 0.58 9.1 0.54
Decline in prices 5.0 0.41 5.4 0.54 4.4 0.41 4.8 0.42 4.1 0.39
Household Durables                    
Prices will increase 75.4 0.87 75.5 0.84 77.7 0.79 77.6 0.84 80.8 0.77
Price increase more than current rate 52.1 1.07 52.2 1.12 54.1 1.06 55.0 1.09 57.2 1.08
Price increase similar to current rate 18.7 0.81 19.3 0.88 18.9 0.79 18.2 0.80 19.3 0.79
Price increase less than current rate 4.6 0.45 4.0 0.39 4.6 0.41 4.3 0.39 4.3 0.41
No changes in prices 18.5 0.77 18.3 0.78 16.4 0.70 16.4 0.72 13.8 0.65
Decline in prices 6.1 0.44 6.1 0.49 6.0 0.45 6.0 0.47 5.4 0.43
Cost of Housing                    
Prices will increase 79.3 0.78 83.4 0.75 85.8 0.67 86.5 0.69 87.4 0.63
Price increase more than current rate 57.0 1.03 61.4 1.14 61.8 1.04 64.4 1.04 66.8 0.98
Price increase similar to current rate 18.1 0.78 18.6 0.87 19.6 0.79 18.5 0.80 17.2 0.77
Price increase less than current rate 4.2 0.43 3.4 0.36 4.5 0.41 3.7 0.38 3.5 0.36
No changes in prices 15.1 0.66 12.4 0.67 10.6 0.58 10.2 0.59 9.8 0.57
Decline in prices 5.6 0.43 4.1 0.42 3.6 0.38 3.3 0.37 2.8 0.30
Cost of Services                    
Prices will increase 82.0 0.75 81.1 0.84 84.2 0.74 84.2 0.74 84.0 0.72
Price increase more than current rate 57.5 1.04 57.4 1.17 58.6 1.08 60.1 1.10 60.2 1.08
Price increase similar to current rate 19.8 0.81 19.9 0.95 21.0 0.81 19.8 0.83 19.7 0.80
Price increase less than current rate 4.6 0.44 3.9 0.39 4.6 0.43 4.3 0.39 4.2 0.41
No changes in prices 15.1 0.68 15.0 0.80 12.9 0.65 12.9 0.67 13.1 0.65
Decline in prices 3.0 0.31 3.8 0.45 2.9 0.37 2.9 0.33 2.8 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: Jan-23
  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 9.7 0.09 9.6 0.30 10.8 0.10 10.5 0.08 10.8 0.11 10.8 0.09
Gender-wise                        
Male 10.0 0.13 10.0 0.15 11.0 0.13 10.6 0.11 10.8 0.16 10.9 0.19
Female 9.5 0.13 9.2 0.34 10.7 0.13 10.4 0.09 10.8 0.15 10.8 0.09
Category-wise                        
Financial Sector Employees 9.8 0.61 9.5 0.76 10.8 0.66 10.6 0.73 11.3 0.84 11.5 1.03
Other Employees 9.9 0.17 9.9 0.25 11.0 0.17 10.6 0.12 11.0 0.20 11.0 0.26
Self Employed 10.1 0.18 10.1 0.11 11.1 0.18 10.7 0.18 10.8 0.24 10.9 0.30
Homemaker 9.6 0.15 9.4 0.38 10.7 0.15 10.4 0.09 11.0 0.18 10.9 0.21
Retired Persons 9.9 0.32 9.9 0.48 10.9 0.31 10.6 0.28 10.8 0.38 11.1 0.49
Daily Workers 9.6 0.26 9.3 0.60 10.8 0.27 10.4 0.28 10.5 0.34 10.6 0.22
Other category 9.1 0.22 8.6 0.29 10.1 0.23 9.9 0.29 10.2 0.27 10.5 0.22
Age Group-wise                        
Up to 25 years 8.9 0.19 8.3 0.23 10.1 0.20 9.5 0.34 10.2 0.23 10.2 0.21
25 to 30 years 9.5 0.17 9.3 0.40 10.6 0.18 10.4 0.13 10.9 0.21 10.9 0.24
30 to 35 years 9.9 0.21 9.9 0.30 11.0 0.21 10.6 0.14 11.1 0.24 11.2 0.39
35 to 40 years 9.8 0.20 9.9 0.30 11.0 0.20 10.7 0.16 11.0 0.24 11.1 0.38
40 to 45 years 10.0 0.22 10.1 0.23 11.0 0.21 10.6 0.17 10.8 0.26 10.8 0.29
45 to 50 years 10.6 0.24 10.3 0.10 11.3 0.23 10.9 0.36 11.4 0.27 12.4 0.62
50 to 55 years 10.2 0.28 10.1 0.29 11.1 0.28 10.7 0.28 11.2 0.32 11.6 0.67
55 to 60 years 9.5 0.30 9.1 0.54 10.6 0.32 10.4 0.20 10.6 0.36 10.7 0.19
60 years and above 10.1 0.26 10.0 0.34 11.1 0.26 10.7 0.23 10.4 0.35 10.8 0.31
City-wise                        
Ahmedabad 8.7 0.31 7.8 0.58 9.9 0.38 9.0 0.77 10.0 0.46 9.7 0.90
Bengaluru 9.1 0.27 9.5 0.74 10.3 0.26 10.3 0.29 10.9 0.30 11.2 0.58
Bhopal 9.2 1.02 8.0 1.82 10.2 1.02 9.7 1.66 9.8 0.90 10.1 1.97
Bhubaneswar 8.5 0.62 7.6 1.39 10.5 0.74 10.5 1.36 10.6 0.74 11.2 1.63
Chennai 9.6 0.36 9.9 0.53 11.6 0.40 11.4 0.73 12.3 0.38 13.3 1.10
Delhi 10.8 0.22 10.4 0.10 11.7 0.23 11.4 0.54 11.4 0.26 11.8 0.63
Guwahati 8.2 0.55 7.6 1.03 8.9 0.61 8.1 0.83 9.6 0.73 8.9 0.83
Hyderabad 8.7 0.39 7.9 0.70 9.6 0.43 9.2 0.61 9.8 0.52 10.4 0.65
Jaipur 7.8 0.33 7.4 0.42 8.4 0.37 8.1 0.45 8.3 0.36 8.3 0.46
Jammu 12.0 0.74 11.5 1.61 11.8 0.93 12.8 2.17 10.2 1.00 11.6 1.88
Kolkata 10.8 0.31 10.3 0.24 11.9 0.31 11.7 0.79 12.1 0.33 13.1 1.00
Lucknow 9.0 0.50 8.9 0.59 10.0 0.50 10.0 0.57 9.9 0.62 10.3 0.71
Mumbai 10.3 0.22 9.7 0.33 11.5 0.22 10.8 0.23 10.9 0.29 11.1 0.42
Nagpur 9.9 0.55 9.5 0.70 11.2 0.57 10.6 1.01 11.6 0.56 11.8 1.21
Patna 7.8 0.42 7.4 0.37 8.5 0.45 8.1 0.37 8.6 0.49 8.3 0.28
Thiruvananthapuram 6.8 0.51 5.5 0.20 8.3 0.49 7.4 0.58 9.3 0.57 8.8 0.97
Chandigarh 11.0 0.65 11.0 1.28 11.0 0.66 11.4 1.57 10.7 0.73 12.1 1.91
Ranchi 8.4 0.39 8.0 0.30 9.0 0.52 8.6 0.39 9.1 0.55 9.3 0.57
Raipur 8.5 0.65 8.2 0.78 9.4 0.63 9.1 0.84 10.0 0.97 10.6 0.80
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-22 9.9 0.10 9.7 0.28 11.1 0.10 10.6 0.08 10.7 0.11 10.7 0.09
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
Jan-23 9.7 0.09 9.6 0.30 10.8 0.10 10.5 0.08 10.8 0.11 10.8 0.09
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-22 66.8 65.8 60.5 61.7 66.0
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
Jan-23 65.6 67.3 62.6 66.2 66.5
One Year Ahead
Jan-22 71.7 72.4 65.2 67.5 72.9
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
Jan-23 75.2 74.8 68.4 74.7 74.0
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: Jan-23
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 3 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 12
1-<2 2 19 8 2 1 3 0 0 0 0 0 0 0 0 0 0 0 0 35
2-<3 0 10 62 45 21 12 0 0 1 0 1 0 0 0 0 0 0 2 154
3-<4 1 0 5 56 45 49 14 0 0 1 0 0 0 0 0 0 0 3 174
4-<5 0 1 6 5 76 52 30 5 6 1 0 0 0 0 0 2 0 0 184
5-<6 1 2 7 23 23 357 142 196 90 10 117 2 2 0 0 11 1 5 989
6-<7 0 0 0 1 9 8 158 96 68 27 20 0 8 0 0 1 0 0 396
7-<8 0 0 0 0 3 12 7 174 122 63 55 3 8 0 4 1 1 0 453
8-<9 1 0 1 2 5 6 9 8 188 96 149 19 15 4 1 1 4 0 509
9-<10 0 0 0 0 0 3 2 0 4 68 70 23 25 4 1 3 1 0 204
10-<11 0 0 1 1 5 27 6 4 14 9 438 114 242 81 16 277 122 3 1360
11-<12 0 0 0 0 0 0 1 0 1 1 0 15 12 11 5 2 3 0 51
12-<13 0 0 0 0 1 0 0 0 2 0 1 0 47 19 18 27 10 0 125
13-<14 0 0 0 0 1 0 0 0 0 0 0 0 1 14 3 7 5 0 31
14-<15 0 0 0 0 0 0 0 0 0 0 1 1 1 1 11 4 10 1 30
15-<16 0 0 0 1 0 5 0 2 0 0 7 0 1 2 1 87 195 1 302
>=16 0 0 0 2 0 5 2 2 0 0 20 0 2 1 2 21 954 4 1015
Total 11 33 93 138 190 539 371 487 496 276 879 177 364 137 62 444 1307 20 6024
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-23
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 3 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 12
1-<2 13 5 8 2 4 1 1 0 0 0 1 0 0 0 0 0 0 0 35
2-<3 18 6 31 36 29 21 1 4 3 2 1 0 0 0 0 0 0 2 154
3-<4 16 0 2 30 28 51 19 5 4 3 8 4 1 0 0 0 1 2 174
4-<5 24 0 2 1 37 41 37 11 17 3 6 1 2 0 0 2 0 0 184
5-<6 91 0 5 6 11 184 96 154 105 43 210 8 23 7 4 24 16 2 989
6-<7 32 0 0 0 1 5 90 76 91 19 47 10 11 2 1 7 4 0 396
7-<8 45 0 0 0 0 5 5 99 88 85 68 13 20 3 10 8 4 0 453
8-<9 34 0 1 0 2 4 3 4 99 63 150 40 63 15 6 11 14 0 509
9-<10 13 0 0 0 0 1 0 1 4 32 49 25 39 14 7 12 7 0 204
10-<11 93 0 0 0 0 9 5 3 6 4 246 70 198 60 51 329 283 3 1360
11-<12 4 0 0 0 0 0 0 0 0 1 0 10 9 11 8 3 5 0 51
12-<13 7 0 0 0 0 0 0 2 0 0 0 0 17 11 18 38 32 0 125
13-<14 3 0 0 0 0 0 0 0 0 0 1 0 0 5 3 13 6 0 31
14-<15 2 0 0 0 0 0 0 0 0 0 0 1 0 0 9 5 11 2 30
15-<16 18 0 0 1 0 1 0 0 0 0 8 0 1 0 2 53 216 2 302
>=16 88 0 0 0 0 1 0 1 1 0 12 0 1 0 2 16 885 8 1015
Total 507 11 52 77 113 324 257 360 418 255 807 182 385 128 121 521 1485 21 6024
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 07, 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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