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Date : Apr 06, 2023
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of March 2023 round of its bi-monthly inflation expectations survey of households (IESH)1 2. The survey was conducted during March 2-11, 2023 in 19 major cities with responses from 6,075 urban households. Female respondents accounted for 50.5 per cent of this sample.

Highlights:

  1. Households’ perception for the current inflation declined by 70 basis points (bps) to 8.9 per cent in the latest survey round [Charts 1a and 1b; Table 3].

  2. Both three months and one year ahead inflation expectations moderated by 30 bps each to 10.2 per cent and 10.5 per cent, respectively, as compared to that in January 2023 [Charts 1a and 1b; Table 3].

  3. Though the expectations on general prices and inflation remained elevated, relatively lower share of households expect prices to rise, when compared to the previous survey round [Table 1(a) and Table 1(b)].

  4. Households’ expectations on overall prices were generally aligned to their perception on prices of food and non-food items, and cost of services [Table 4].

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 Mar-22 Sep-22 Nov-22 Jan-23 Mar-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 89.9 0.64 85.0 0.77 83.8 0.76 84.3 0.76 83.8 0.83
Price increase more than current rate 67.2 1.27 59.9 1.14 58.5 1.13 60.8 1.14 60.6 1.17
Price increase similar to current rate 19.3 0.96 20.9 0.85 20.8 0.89 20.2 0.86 19.8 0.87
Price increase less than current rate 3.5 0.45 4.2 0.44 4.4 0.43 3.4 0.36 3.5 0.36
No changes in prices 8.6 0.59 12.6 0.70 13.7 0.69 13.3 0.71 13.3 0.74
Decline in prices 1.5 0.22 2.4 0.33 2.5 0.32 2.3 0.30 2.8 0.41
Food Product                    
Prices will increase 89.6 0.62 85.3 0.69 85.0 0.72 84.6 0.72 84.0 0.75
Price increase more than current rate 68.2 1.14 61.9 1.09 62.0 1.04 61.1 1.08 62.1 1.12
Price increase similar to current rate 16.2 0.88 17.4 0.75 17.2 0.76 18.4 0.77 16.9 0.79
Price increase less than current rate 5.2 0.48 6.1 0.49 5.9 0.48 5.1 0.43 5.1 0.42
No changes in prices 6.9 0.51 9.3 0.55 9.9 0.58 10.2 0.59 9.7 0.59
Decline in prices 3.5 0.36 5.4 0.45 5.1 0.44 5.2 0.45 6.3 0.53
Non- Food Product                    
Prices will increase 88.4 0.63 82.3 0.74 81.1 0.77 81.8 0.77 81.3 0.79
Price increase more than current rate 65.6 1.17 55.8 1.08 57.2 1.05 56.4 1.08 58.6 1.10
Price increase similar to current rate 17.6 0.87 20.5 0.79 17.9 0.78 20.5 0.82 17.7 0.80
Price increase less than current rate 5.2 0.49 6.0 0.48 6.0 0.48 4.9 0.44 5.1 0.43
No changes in prices 8.7 0.56 13.1 0.67 14.4 0.70 13.4 0.67 13.3 0.67
Decline in prices 2.9 0.31 4.6 0.42 4.5 0.43 4.7 0.43 5.4 0.51
Household Durables                    
Prices will increase 73.5 0.89 70.2 0.89 68.3 0.93 72.4 0.90 67.9 0.92
Price increase more than current rate 51.9 1.20 48.0 1.03 47.2 1.07 50.3 1.07 47.8 1.09
Price increase similar to current rate 16.0 0.83 16.8 0.70 16.0 0.75 17.5 0.71 15.8 0.75
Price increase less than current rate 5.5 0.50 5.3 0.45 5.1 0.43 4.6 0.42 4.2 0.41
No changes in prices 20.4 0.83 22.8 0.84 24.5 0.87 21.2 0.84 22.4 0.85
Decline in prices 6.1 0.44 7.1 0.50 7.3 0.49 6.3 0.47 9.7 0.60
Cost of Housing                    
Prices will increase 75.8 0.94 75.7 0.92 76.5 0.88 78.0 0.86 78.2 0.92
Price increase more than current rate 54.9 1.23 53.2 1.07 55.4 1.09 58.4 1.08 57.7 1.14
Price increase similar to current rate 16.6 0.80 17.7 0.70 16.8 0.75 16.3 0.73 16.7 0.76
Price increase less than current rate 4.3 0.40 4.8 0.42 4.3 0.41 3.3 0.35 3.8 0.39
No changes in prices 18.9 0.86 20.2 0.88 19.3 0.83 18.9 0.84 18.1 0.83
Decline in prices 5.4 0.46 4.1 0.39 4.2 0.40 3.1 0.34 3.7 0.44
Cost of Services                    
Prices will increase 76.3 0.88 72.2 0.91 70.6 0.89 71.7 0.90 73.2 0.90
Price increase more than current rate 54.5 1.19 49.4 1.10 49.1 1.04 49.9 1.08 51.7 1.11
Price increase similar to current rate 16.8 0.80 17.9 0.75 16.9 0.73 17.6 0.71 17.8 0.76
Price increase less than current rate 5.0 0.47 5.0 0.41 4.5 0.41 4.1 0.40 3.6 0.37
No changes in prices 21.2 0.86 24.7 0.87 26.6 0.88 25.5 0.88 23.2 0.86
Decline in prices 2.4 0.29 3.1 0.36 2.9 0.33 2.7 0.30 3.6 0.40
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 Mar-22 Sep-22 Nov-22 Jan-23 Mar-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 91.5 0.58 90.8 0.59 90.8 0.57 91.6 0.53 90.4 0.66
Price increase more than current rate 71.0 1.19 68.1 1.12 69.5 1.08 70.8 1.02 69.3 1.11
Price increase similar to current rate 17.4 0.93 19.3 0.88 18.2 0.87 17.9 0.81 18.1 0.87
Price increase less than current rate 3.1 0.41 3.5 0.38 3.1 0.34 3.0 0.33 3.0 0.33
No changes in prices 6.1 0.48 6.6 0.49 6.4 0.45 5.7 0.43 6.4 0.50
Decline in prices 2.4 0.29 2.5 0.34 2.8 0.33 2.6 0.31 3.2 0.43
Food Product                    
Prices will increase 85.3 0.72 86.4 0.67 87.1 0.64 88.0 0.64 86.3 0.71
Price increase more than current rate 60.9 1.19 60.5 1.09 62.9 1.07 62.7 1.07 63.7 1.16
Price increase similar to current rate 19.6 0.91 21.0 0.84 19.6 0.83 20.7 0.87 18.5 0.86
Price increase less than current rate 4.8 0.47 4.9 0.42 4.7 0.42 4.5 0.42 4.1 0.38
No changes in prices 9.8 0.59 8.3 0.52 7.8 0.50 7.6 0.50 8.1 0.53
Decline in prices 5.0 0.41 5.3 0.45 5.0 0.41 4.4 0.39 5.6 0.52
Non- Food Product                    
Prices will increase 85.8 0.73 86.0 0.69 85.0 0.71 86.7 0.67 85.4 0.73
Price increase more than current rate 62.4 1.18 59.8 1.09 60.7 1.09 62.0 1.09 62.9 1.12
Price increase similar to current rate 18.9 0.89 20.9 0.83 19.9 0.84 20.5 0.83 18.2 0.78
Price increase less than current rate 4.5 0.44 5.4 0.45 4.5 0.41 4.3 0.41 4.3 0.40
No changes in prices 9.7 0.60 9.5 0.56 10.1 0.58 9.1 0.54 9.4 0.55
Decline in prices 4.5 0.40 4.4 0.41 4.8 0.42 4.1 0.39 5.2 0.51
Household Durables                    
Prices will increase 77.3 0.84 77.7 0.79 77.6 0.84 80.8 0.77 76.5 0.85
Price increase more than current rate 54.1 1.16 54.1 1.06 55.0 1.09 57.2 1.08 55.8 1.15
Price increase similar to current rate 18.3 0.89 18.9 0.79 18.2 0.80 19.3 0.79 16.9 0.80
Price increase less than current rate 4.8 0.48 4.6 0.41 4.3 0.39 4.3 0.41 3.8 0.38
No changes in prices 17.1 0.74 16.4 0.70 16.4 0.72 13.8 0.65 15.4 0.70
Decline in prices 5.6 0.43 6.0 0.45 6.0 0.47 5.4 0.43 8.1 0.60
Cost of Housing                    
Prices will increase 83.1 0.75 85.8 0.67 86.5 0.69 87.4 0.63 87.4 0.65
Price increase more than current rate 61.1 1.17 61.8 1.04 64.4 1.04 66.8 0.98 66.6 1.06
Price increase similar to current rate 17.6 0.88 19.6 0.79 18.5 0.80 17.2 0.77 17.4 0.80
Price increase less than current rate 4.5 0.43 4.5 0.41 3.7 0.38 3.5 0.36 3.4 0.37
No changes in prices 13.2 0.67 10.6 0.58 10.2 0.59 9.8 0.57 9.2 0.54
Decline in prices 3.7 0.36 3.6 0.38 3.3 0.37 2.8 0.30 3.4 0.41
Cost of Services                    
Prices will increase 83.0 0.79 84.2 0.74 84.2 0.74 84.0 0.72 83.6 0.80
Price increase more than current rate 59.2 1.25 58.6 1.08 60.1 1.10 60.2 1.08 60.5 1.14
Price increase similar to current rate 18.8 0.93 21.0 0.81 19.8 0.83 19.7 0.80 18.8 0.83
Price increase less than current rate 5.0 0.47 4.6 0.43 4.3 0.39 4.2 0.41 4.3 0.39
No changes in prices 14.1 0.71 12.9 0.65 12.9 0.67 13.1 0.65 13.0 0.68
Decline in prices 3.0 0.32 2.9 0.37 2.9 0.33 2.8 0.33 3.4 0.44
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: Mar-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 9.5 0.10 8.9 0.17 10.5 0.10 10.2 0.08 10.4 0.11 10.5 0.07
Gender-wise                        
Male 9.8 0.14 9.4 0.34 10.7 0.14 10.4 0.11 10.5 0.16 10.6 0.11
Female 9.4 0.13 8.8 0.16 10.5 0.13 10.1 0.11 10.5 0.15 10.5 0.09
Category-wise                        
Financial Sector Employees 8.6 0.37 7.4 0.27 9.3 0.34 8.4 0.58 9.9 0.40 9.9 0.61
Other Employees 9.6 0.18 9.0 0.27 10.6 0.18 10.3 0.14 10.5 0.21 10.5 0.12
Self Employed 9.9 0.21 9.6 0.40 10.6 0.21 10.3 0.19 10.3 0.25 10.6 0.15
Homemaker 9.4 0.15 8.7 0.19 10.4 0.15 10.1 0.15 10.4 0.17 10.4 0.11
Retired Persons 10.7 0.37 10.4 0.13 11.7 0.37 12.4 0.88 11.4 0.46 12.8 1.08
Daily Workers 9.5 0.24 9.0 0.43 10.6 0.25 10.2 0.23 10.2 0.30 10.3 0.19
Other category 9.3 0.22 8.5 0.27 10.3 0.24 9.9 0.29 10.5 0.28 10.6 0.26
Age Group-wise                        
Up to 25 years 8.8 0.18 8.1 0.19 9.9 0.19 9.5 0.34 10.2 0.21 10.3 0.15
25 to 30 years 9.2 0.19 8.4 0.23 10.3 0.19 10.0 0.23 10.2 0.23 10.4 0.11
30 to 35 years 9.6 0.21 9.2 0.36 10.4 0.22 10.0 0.26 10.5 0.25 10.4 0.16
35 to 40 years 9.7 0.20 9.2 0.37 10.7 0.21 10.4 0.16 10.7 0.24 10.7 0.22
40 to 45 years 9.7 0.22 9.4 0.49 10.7 0.23 10.3 0.19 10.5 0.27 10.6 0.15
45 to 50 years 9.9 0.22 9.9 0.39 10.9 0.23 10.4 0.15 10.7 0.28 10.6 0.17
50 to 55 years 10.2 0.28 10.2 0.18 10.9 0.29 10.7 0.27 10.5 0.37 10.7 0.27
55 to 60 years 9.9 0.29 9.6 0.46 11.2 0.29 10.7 0.27 10.7 0.36 10.8 0.29
60 years and above 10.3 0.30 10.1 0.27 11.1 0.30 10.8 0.49 10.9 0.36 11.3 0.62
City-wise                        
Ahmedabad 9.4 0.33 8.8 0.49 10.6 0.35 9.8 0.45 10.6 0.41 10.3 0.36
Bengaluru 8.3 0.31 7.1 0.71 9.6 0.28 9.0 0.67 10.1 0.31 10.2 0.32
Bhopal 7.7 0.67 6.1 0.72 8.8 0.64 7.4 1.21 8.6 0.71 7.7 1.27
Bhubaneswar 7.3 0.32 6.6 0.49 8.7 0.66 7.9 0.36 9.2 0.90 9.2 0.51
Chennai 10.8 0.47 10.6 0.54 12.0 0.41 13.2 1.59 12.3 0.40 14.7 1.51
Delhi 10.4 0.27 10.2 0.15 11.1 0.28 10.7 0.32 10.7 0.29 10.8 0.31
Guwahati 9.0 0.72 8.8 0.92 10.0 0.68 9.8 0.74 10.5 0.72 10.5 0.71
Hyderabad 8.9 0.43 8.3 1.03 9.6 0.42 9.1 0.82 9.2 0.57 9.7 0.80
Jaipur 8.5 0.60 7.9 0.67 8.8 0.61 8.0 0.85 8.2 0.59 8.1 0.67
Jammu 11.0 0.77 10.7 1.17 10.3 0.64 10.1 0.77 8.4 0.80 8.7 1.47
Kolkata 10.2 0.28 9.7 0.41 11.2 0.29 10.7 0.30 11.3 0.29 11.5 0.71
Lucknow 9.7 0.37 9.5 0.65 10.4 0.40 10.4 0.35 10.6 0.56 11.0 0.72
Mumbai 9.7 0.20 8.8 0.16 11.0 0.21 10.4 0.14 10.5 0.26 10.6 0.12
Nagpur 9.6 0.38 8.9 0.66 11.0 0.45 10.3 0.52 10.9 0.56 10.9 0.72
Patna 8.7 0.71 7.9 0.71 9.1 0.71 8.4 0.59 8.4 0.99 8.3 0.58
Thiruvananthapuram 6.9 0.80 5.6 0.08 8.4 0.70 7.5 0.25 9.7 0.65 10.0 0.55
Chandigarh 12.1 0.56 12.8 2.04 12.1 0.55 13.1 2.00 11.6 0.71 13.6 1.89
Ranchi 8.8 0.33 8.0 0.28 9.3 0.33 8.6 0.31 9.7 0.46 9.7 0.51
Raipur 9.0 0.57 9.0 0.70 9.7 0.68 9.8 0.72 10.5 0.88 11.0 0.86
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
Mar-22 9.8 0.12 9.7 0.31 11.1 0.12 10.7 0.09 10.9 0.13 10.8 0.11
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
Mar-23 9.5 0.10 8.9 0.17 10.5 0.10 10.2 0.08 10.4 0.11 10.5 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
Mar-22 70.5 70.8 60.2 62.0 65.8
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
Mar-23 67.4 68.8 60.9 65.9 68.0
One Year Ahead
Mar-22 73.1 74.2 67.5 69.4 74.4
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
Mar-23 75.7 75.7 69.6 74.9 75.7
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: Mar-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 3 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 5
1-<2 0 11 10 5 2 2 1 0 0 0 0 0 0 0 0 0 0 0 31
2-<3 0 7 46 44 44 17 3 1 0 0 1 0 1 0 0 0 0 0 164
3-<4 0 4 7 61 36 46 11 2 4 0 2 0 0 0 0 0 0 0 173
4-<5 1 1 8 9 69 65 43 12 3 2 1 0 1 0 0 0 0 0 215
5-<6 1 2 11 28 25 370 134 241 93 15 133 1 1 0 0 10 1 0 1066
6-<7 0 0 2 5 7 7 170 104 78 22 14 1 6 0 1 0 1 0 418
7-<8 1 0 2 2 6 8 11 181 140 64 67 5 5 0 3 0 0 0 495
8-<9 1 0 1 5 4 8 10 7 189 102 163 18 24 1 1 1 3 0 538
9-<10 0 0 0 1 3 1 2 2 4 85 79 37 31 3 1 4 1 0 254
10-<11 1 0 4 3 7 45 6 8 13 11 379 73 214 58 24 249 95 1 1191
11-<12 0 0 0 0 0 0 0 0 0 1 1 13 11 6 3 4 3 0 42
12-<13 0 0 0 0 0 1 1 2 1 0 2 0 55 9 17 36 10 0 134
13-<14 0 0 0 0 0 0 0 0 1 0 1 1 0 11 5 7 4 0 30
14-<15 0 0 0 0 0 0 0 0 0 1 1 0 1 0 14 5 12 0 34
15-<16 0 0 0 1 1 6 1 2 1 0 3 0 2 1 0 100 179 2 299
>=16 1 0 2 0 1 14 0 2 0 0 13 1 1 0 0 21 919 11 986
Total 9 26 93 164 205 590 393 564 527 303 861 150 353 89 69 437 1228 14 6075
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: Mar-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 2 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 5
1-<2 5 3 6 6 3 6 2 0 0 0 0 0 0 0 0 0 0 0 31
2-<3 17 3 26 32 43 17 11 7 3 1 3 0 1 0 0 0 0 0 164
3-<4 22 1 2 26 20 55 17 9 7 4 6 2 2 0 0 0 0 0 173
4-<5 33 0 1 4 46 31 43 24 13 5 10 1 3 0 1 0 0 0 215
5-<6 95 0 3 13 11 209 96 174 113 27 245 6 15 6 0 32 19 2 1066
6-<7 54 0 0 0 3 7 75 81 95 27 41 10 13 3 1 3 5 0 418
7-<8 47 0 0 1 0 7 6 79 103 98 108 14 21 0 4 6 1 0 495
8-<9 41 0 0 1 3 1 6 5 114 68 181 25 57 12 5 12 7 0 538
9-<10 22 0 0 0 0 0 2 1 6 48 57 45 38 13 6 12 4 0 254
10-<11 115 0 1 2 1 9 3 7 12 6 225 45 163 65 31 279 225 2 1191
11-<12 6 0 0 0 0 0 0 0 0 0 0 6 11 6 3 4 5 1 42
12-<13 10 0 0 0 0 0 0 0 0 0 2 0 30 11 21 35 25 0 134
13-<14 2 0 0 0 0 0 0 0 0 0 0 0 1 9 1 10 7 0 30
14-<15 5 0 0 0 0 0 0 0 0 0 0 0 0 1 7 3 18 0 34
15-<16 29 0 0 0 0 1 1 1 2 0 1 0 0 1 0 56 205 2 299
>=16 82 0 1 0 0 2 0 1 2 0 9 0 2 1 0 11 867 8 986
Total 587 8 41 85 130 345 262 389 470 284 888 154 357 128 80 464 1388 15 6075
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 February 08, 2023.

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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