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Date : Dec 08, 2023
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of November 2023 round of its bi-monthly inflation expectations survey of households (IESH)1 2. The survey was conducted during November 2-11, 2023 in 19 major cities, with responses from 6,036 urban households. Female respondents accounted for 50.1 per cent of this sample.

Highlights:

  1. Households’ perception on current inflation declined by 20 basis points (bps) from the previous survey round to 8.2 per cent in November 2023 [Charts 1(a) and 1(b); Table 3].

  2. Median inflation expectation remained stable for the three months ahead period at 9.1 per cent, but it increased for one year horizon by 20 bps to 10.1 per cent in November 2023 [Charts 1(a) and 1(b); Table 3].

  3. Larger share of households expects higher inflation for both three months and one year ahead periods [Tables 1(a) and 1(b)].

  4. Households expect some rise in price and inflationary pressures across major product groups for the year ahead [Table 1(b)].

  5. Expectations regarding overall prices and inflation over the next three months were more aligned with those of food products and services; for the year ahead, such alignment is more pronounced with the prospects for food products and housing segments [Table 4].

Chart 1a and 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-22 May-23 Jul-23 Sep-23 Nov-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 83.8 0.76 81.2 0.82 80.8 0.86 74.2 0.97 74.1 0.93
Price increase more than current rate 58.5 1.13 59.7 1.08 55.3 1.20 49.5 1.10 50.8 1.13
Price increase similar to current rate 20.8 0.89 17.9 0.77 21.8 0.93 20.0 0.80 19.1 0.85
Price increase less than current rate 4.4 0.43 3.5 0.41 3.6 0.39 4.7 0.47 4.2 0.42
No changes in prices 13.7 0.69 15.7 0.77 16.1 0.79 20.7 0.88 21.2 0.88
Decline in prices 2.5 0.32 3.1 0.35 3.1 0.41 5.0 0.52 4.7 0.45
Food Product                    
Prices will increase 85.0 0.72 82.7 0.73 84.0 0.77 75.4 0.87 75.5 0.90
Price increase more than current rate 62.0 1.04 61.8 1.00 63.5 1.04 55.1 1.05 53.7 1.04
Price increase similar to current rate 17.2 0.76 16.2 0.71 15.5 0.72 15.1 0.71 16.1 0.74
Price increase less than current rate 5.9 0.48 4.7 0.42 5.0 0.44 5.3 0.46 5.8 0.47
No changes in prices 9.9 0.58 11.0 0.61 9.0 0.60 13.2 0.68 15.5 0.76
Decline in prices 5.1 0.44 6.3 0.48 7.0 0.54 11.3 0.66 9.0 0.57
Non- Food Product                    
Prices will increase 81.1 0.77 78.4 0.84 75.5 0.92 69.2 0.93 73.8 0.87
Price increase more than current rate 57.2 1.05 57.1 1.08 52.2 1.16 47.1 1.04 52.4 1.04
Price increase similar to current rate 17.9 0.78 16.6 0.70 18.4 0.80 16.7 0.72 16.1 0.72
Price increase less than current rate 6.0 0.48 4.6 0.43 4.9 0.43 5.4 0.51 5.3 0.46
No changes in prices 14.4 0.70 16.2 0.74 18.3 0.80 20.5 0.77 19.5 0.77
Decline in prices 4.5 0.43 5.4 0.45 6.2 0.54 10.3 0.66 6.7 0.48
Household Durables                    
Prices will increase 68.3 0.93 68.2 0.90 65.8 0.97 62.2 0.99 63.8 0.98
Price increase more than current rate 47.2 1.07 49.5 1.06 45.3 1.12 43.2 1.05 45.5 1.02
Price increase similar to current rate 16.0 0.75 14.8 0.67 15.8 0.75 14.1 0.65 13.4 0.68
Price increase less than current rate 5.1 0.43 3.9 0.38 4.6 0.41 4.9 0.43 4.9 0.43
No changes in prices 24.5 0.87 24.6 0.86 25.0 0.88 26.4 0.88 25.9 0.89
Decline in prices 7.3 0.49 7.2 0.51 9.2 0.60 11.3 0.64 10.3 0.59
Cost of Housing                    
Prices will increase 76.5 0.88 78.1 0.82 76.8 0.94 75.1 0.95 76.8 0.88
Price increase more than current rate 55.4 1.09 59.4 1.06 56.0 1.14 54.3 1.09 57.2 1.09
Price increase similar to current rate 16.8 0.75 15.1 0.74 17.0 0.75 16.3 0.66 15.5 0.72
Price increase less than current rate 4.3 0.41 3.7 0.35 3.7 0.35 4.5 0.43 4.1 0.37
No changes in prices 19.3 0.83 18.7 0.79 20.2 0.88 20.9 0.90 20.0 0.83
Decline in prices 4.2 0.40 3.2 0.36 3.0 0.37 4.1 0.46 3.2 0.36
Cost of Services                    
Prices will increase 70.6 0.89 70.6 0.89 67.7 0.97 63.0 1.04 63.3 0.96
Price increase more than current rate 49.1 1.04 51.3 1.00 47.3 1.13 44.7 1.05 43.7 1.09
Price increase similar to current rate 16.9 0.73 15.8 0.69 15.9 0.72 14.5 0.68 15.5 0.70
Price increase less than current rate 4.5 0.41 3.5 0.37 4.5 0.40 3.9 0.40 4.2 0.40
No changes in prices 26.6 0.88 26.2 0.87 28.2 0.90 31.2 0.99 31.5 0.93
Decline in prices 2.9 0.33 3.2 0.34 4.1 0.43 5.7 0.54 5.1 0.48
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-22 May-23 Jul-23 Sep-23 Nov-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 90.8 0.57 89.6 0.61 88.6 0.68 86.2 0.74 89.0 0.65
Price increase more than current rate 69.5 1.08 70.2 1.05 65.0 1.07 62.2 1.05 67.2 1.07
Price increase similar to current rate 18.2 0.87 16.7 0.77 20.5 0.86 19.9 0.81 18.4 0.87
Price increase less than current rate 3.1 0.34 2.7 0.32 3.1 0.33 4.1 0.43 3.4 0.38
No changes in prices 6.4 0.45 7.3 0.50 8.6 0.57 9.6 0.59 8.4 0.56
Decline in prices 2.8 0.33 3.1 0.35 2.8 0.35 4.2 0.48 2.7 0.35
Food Product                    
Prices will increase 87.1 0.64 86.9 0.66 84.7 0.75 82.8 0.80 86.1 0.71
Price increase more than current rate 62.9 1.07 64.6 0.99 60.6 1.11 57.9 1.09 63.2 1.06
Price increase similar to current rate 19.6 0.83 18.3 0.77 20.1 0.85 19.7 0.82 18.4 0.83
Price increase less than current rate 4.7 0.42 4.0 0.40 4.0 0.38 5.3 0.48 4.5 0.41
No changes in prices 7.8 0.50 8.0 0.51 9.3 0.59 9.6 0.58 8.8 0.56
Decline in prices 5.0 0.41 5.2 0.44 6.0 0.48 7.6 0.60 5.1 0.44
Non- Food Product                    
Prices will increase 85.0 0.71 84.1 0.72 81.6 0.85 78.9 0.83 82.6 0.78
Price increase more than current rate 60.7 1.09 62.0 1.05 57.1 1.16 54.7 1.05 60.7 1.09
Price increase similar to current rate 19.9 0.84 17.9 0.77 20.6 0.83 19.7 0.78 17.4 0.80
Price increase less than current rate 4.5 0.41 4.2 0.41 3.9 0.38 4.5 0.44 4.5 0.42
No changes in prices 10.1 0.58 11.1 0.61 13.5 0.72 13.9 0.66 12.9 0.65
Decline in prices 4.8 0.42 4.8 0.43 4.8 0.48 7.2 0.57 4.5 0.43
Household Durables                    
Prices will increase 77.6 0.84 76.9 0.83 75.8 0.88 73.9 0.91 75.5 0.89
Price increase more than current rate 55.0 1.09 57.0 1.07 53.2 1.10 52.4 1.04 55.3 1.07
Price increase similar to current rate 18.2 0.80 16.1 0.72 18.4 0.80 17.3 0.71 16.3 0.77
Price increase less than current rate 4.3 0.39 3.7 0.37 4.2 0.38 4.1 0.42 3.9 0.39
No changes in prices 16.4 0.72 16.7 0.71 17.7 0.76 18.5 0.76 17.7 0.76
Decline in prices 6.0 0.47 6.4 0.48 6.5 0.48 7.7 0.56 6.8 0.50
Cost of Housing                    
Prices will increase 86.5 0.69 87.9 0.63 86.8 0.69 86.1 0.70 87.9 0.68
Price increase more than current rate 64.4 1.04 67.4 1.00 64.6 1.05 65.0 1.04 68.5 1.02
Price increase similar to current rate 18.5 0.80 17.1 0.76 18.5 0.79 16.9 0.73 16.3 0.78
Price increase less than current rate 3.7 0.38 3.4 0.34 3.8 0.37 4.2 0.42 3.1 0.36
No changes in prices 10.2 0.59 9.1 0.54 10.4 0.60 10.1 0.56 9.4 0.61
Decline in prices 3.3 0.37 3.0 0.34 2.7 0.34 3.8 0.43 2.7 0.34
Cost of Services                    
Prices will increase 84.2 0.74 83.2 0.72 80.9 0.80 78.4 0.86 80.8 0.81
Price increase more than current rate 60.1 1.10 61.1 1.05 57.3 1.12 56.2 1.05 59.2 1.08
Price increase similar to current rate 19.8 0.83 18.2 0.81 19.6 0.83 18.0 0.70 17.6 0.80
Price increase less than current rate 4.3 0.39 3.9 0.36 4.0 0.39 4.2 0.43 4.0 0.40
No changes in prices 12.9 0.67 13.7 0.64 15.5 0.72 17.1 0.74 16.3 0.74
Decline in prices 2.9 0.33 3.1 0.34 3.5 0.37 4.4 0.48 2.9 0.36
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-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 8.9 0.09 8.2 0.12 9.7 0.09 9.1 0.18 9.6 0.10 10.1 0.10
Gender-wise                        
Male 9.0 0.13 8.2 0.15 9.8 0.13 9.0 0.20 9.5 0.15 9.8 0.24
Female 8.7 0.13 8.1 0.16 9.7 0.13 9.1 0.23 9.7 0.15 10.1 0.13
Category-wise                        
Financial Sector Employees 8.3 0.42 7.3 0.34 9.0 0.44 7.9 0.39 9.0 0.50 8.6 0.53
Other Employees 8.7 0.18 8.2 0.19 9.8 0.19 9.0 0.27 9.7 0.22 10.0 0.22
Self Employed 9.0 0.19 8.2 0.28 9.8 0.20 9.3 0.37 9.6 0.24 9.8 0.31
Homemaker 8.8 0.15 8.3 0.17 9.7 0.15 9.3 0.29 9.6 0.18 10.1 0.17
Retired Persons 10.2 0.36 9.9 0.65 10.9 0.34 10.5 0.44 9.9 0.44 10.1 0.43
Daily Workers 9.0 0.25 8.4 0.45 9.9 0.29 9.1 0.46 9.5 0.34 9.7 0.54
Other category 8.2 0.20 7.5 0.21 9.0 0.21 8.2 0.23 8.9 0.26 9.1 0.42
Age Group-wise                        
Up to 25 years 8.2 0.17 7.7 0.19 9.1 0.19 8.4 0.20 9.4 0.21 9.4 0.37
25 to 30 years 8.5 0.18 7.9 0.20 9.3 0.18 8.5 0.24 9.5 0.22 9.7 0.31
30 to 35 years 8.8 0.19 8.3 0.23 9.6 0.20 9.3 0.34 9.7 0.24 10.1 0.20
35 to 40 years 9.1 0.20 8.3 0.32 9.9 0.20 9.5 0.29 9.8 0.23 10.1 0.17
40 to 45 years 9.1 0.22 8.4 0.32 10.1 0.22 9.9 0.33 9.6 0.28 10.2 0.17
45 to 50 years 9.7 0.25 9.1 0.52 10.5 0.25 9.8 0.44 10.0 0.30 10.3 0.20
50 to 55 years 9.2 0.26 8.8 0.44 10.1 0.27 10.0 0.31 9.7 0.32 10.1 0.28
55 to 60 years 9.1 0.32 8.6 0.68 9.9 0.33 9.5 0.70 9.4 0.43 9.8 0.68
60 years and above 9.8 0.30 9.4 0.67 10.7 0.27 10.3 0.18 10.0 0.37 10.3 0.26
City-wise                        
Ahmedabad 7.2 0.20 6.5 0.23 7.9 0.25 7.2 0.26 7.2 0.30 7.4 0.25
Bengaluru 7.5 0.27 6.0 0.26 8.7 0.29 7.7 0.43 9.4 0.32 9.1 0.58
Bhopal 7.7 0.54 6.0 0.39 8.5 0.52 7.1 0.87 8.2 0.64 7.5 0.88
Bhubaneswar 9.9 0.92 9.9 1.00 11.5 0.85 11.6 1.49 11.0 0.85 11.4 1.90
Chennai 8.0 0.33 7.3 0.32 9.4 0.33 8.7 0.26 10.0 0.36 10.3 0.15
Delhi 10.1 0.25 10.2 0.18 10.8 0.24 10.5 0.18 10.4 0.28 10.6 0.28
Guwahati 8.6 0.68 8.3 0.93 9.0 0.67 8.8 0.87 9.6 0.67 9.7 0.77
Hyderabad 8.6 0.42 7.7 0.57 9.4 0.42 8.3 0.50 9.7 0.37 10.1 0.35
Jaipur 8.5 0.36 8.0 0.45 8.6 0.36 8.1 0.37 7.8 0.67 8.0 0.69
Jammu 9.9 0.59 9.8 0.89 8.5 0.99 7.6 1.03 8.1 0.61 7.2 0.71
Kolkata 10.2 0.30 10.1 0.32 11.2 0.28 10.7 0.39 11.3 0.31 11.3 0.73
Lucknow 9.3 0.49 8.6 0.76 9.8 0.47 9.2 0.70 9.3 0.43 9.3 0.66
Mumbai 8.9 0.22 8.3 0.18 9.8 0.23 9.5 0.38 9.3 0.27 10.1 0.29
Nagpur 8.9 0.47 8.2 0.70 10.3 0.45 9.9 0.45 10.4 0.56 10.6 0.31
Patna 7.7 0.31 7.5 0.39 8.0 0.35 7.9 0.34 7.9 0.46 8.0 0.30
Thiruvananthapuram 7.6 0.55 6.1 0.62 9.1 0.57 8.4 0.92 10.2 0.59 10.0 0.88
Chandigarh 9.7 0.85 9.5 0.86 9.8 0.96 9.7 1.31 8.7 0.98 9.3 1.55
Ranchi 8.9 0.33 8.3 0.33 9.2 0.32 8.8 0.43 9.6 0.46 10.1 0.44
Raipur 10.5 0.48 10.3 0.33 10.9 0.55 10.5 0.51 10.4 0.68 11.7 0.84
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-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
May-23 9.3 0.09 8.8 0.13 10.3 0.10 10.1 0.08 10.2 0.11 10.4 0.08
Jul-23 9.3 0.09 8.9 0.14 10.2 0.09 10.0 0.15 10.0 0.11 10.3 0.07
Sep-23 9.0 0.09 8.4 0.11 9.7 0.09 9.1 0.17 9.3 0.11 9.9 0.17
Nov-23 8.9 0.09 8.2 0.12 9.7 0.09 9.1 0.18 9.6 0.10 10.1 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 Households durables Housing Cost of services
Three Months Ahead
Nov-22 66.6 67.1 60.2 64.7 66.0
May-23 67.4 68.6 63.4 67.1 69.1
Jul-23 63.1 65.5 60.9 64.5 65.7
Sep-23 62.0 64.3 60.7 63.2 66.3
Nov-23 66.5 61.8 57.0 60.7 66.4
One Year Ahead
Nov-22 74.4 74.8 68.6 73.7 75.0
May-23 75.6 75.3 70.7 76.1 76.4
Jul-23 73.4 73.0 66.9 73.4 73.6
Sep-23 69.8 71.2 66.8 72.2 71.5
Nov-23 74.8 73.9 68.1 75.3 73.9
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: Nov-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 7 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 1 10
1-<2 4 23 13 8 2 0 0 0 0 0 0 0 0 0 0 0 1 0 51
2-<3 0 14 78 58 44 10 1 2 0 0 1 0 0 0 0 0 0 2 210
3-<4 2 2 12 91 70 63 14 0 0 0 2 0 0 0 0 0 0 1 257
4-<5 0 1 9 7 143 87 33 6 8 3 4 0 0 0 0 0 0 0 301
5-<6 0 2 12 21 23 428 176 212 75 10 95 0 2 0 0 8 1 0 1065
6-<7 0 1 4 5 8 13 205 130 75 21 14 2 2 0 0 0 0 1 481
7-<8 0 0 3 2 2 11 14 247 167 60 56 1 4 0 0 1 0 0 568
8-<9 0 0 1 3 4 8 4 6 211 96 154 12 9 4 2 1 0 1 516
9-<10 0 0 0 1 0 1 1 3 4 104 69 17 12 2 2 2 0 1 219
10-<11 0 0 4 2 1 36 14 7 23 10 437 74 187 51 13 209 80 2 1150
11-<12 0 0 0 0 0 0 1 0 1 2 4 16 12 7 3 3 4 1 54
12-<13 0 0 0 1 1 1 2 0 2 1 3 0 45 10 17 24 5 1 113
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 1 3 1 7 2 0 14
14-<15 0 0 0 0 0 0 0 0 0 0 1 0 0 0 9 1 4 0 15
15-<16 0 0 0 0 0 1 0 0 0 0 10 0 1 0 2 90 126 6 236
>=16 0 1 0 2 1 10 0 1 2 0 22 0 1 0 0 22 694 20 776
Total 13 44 136 201 299 671 465 614 568 307 872 122 276 77 49 368 917 37 6036
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-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 5 1 1 0 0 1 2 0 0 0 0 0 0 0 0 0 0 0 10
1-<2 4 14 16 7 5 3 0 0 0 0 1 0 0 0 0 0 1 0 51
2-<3 27 5 43 33 47 34 9 2 3 0 4 0 1 0 0 1 0 1 210
3-<4 35 0 1 42 34 74 31 19 10 1 10 0 0 0 0 0 0 0 257
4-<5 51 0 0 6 65 55 58 20 26 2 14 1 0 0 0 1 1 1 301
5-<6 134 0 3 11 14 194 118 178 108 29 230 11 5 0 1 21 7 1 1065
6-<7 50 0 3 1 3 6 103 89 108 47 53 1 12 0 0 2 2 1 481
7-<8 75 0 1 0 0 2 7 112 115 80 135 4 15 4 3 15 0 0 568
8-<9 56 0 1 0 0 5 1 4 96 63 169 34 52 9 3 16 5 2 516
9-<10 18 0 0 0 1 0 1 0 1 40 65 31 44 4 6 5 2 1 219
10-<11 84 0 2 0 0 16 5 5 12 6 251 58 176 55 29 264 180 7 1150
11-<12 10 0 0 0 0 0 0 0 2 0 1 10 7 4 6 8 5 1 54
12-<13 12 0 0 0 0 0 1 1 2 1 0 1 22 12 12 32 16 1 113
13-<14 0 0 0 0 0 0 0 0 1 0 0 0 0 1 2 2 8 0 14
14-<15 6 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1 6 0 15
15-<16 23 0 0 0 0 2 0 0 0 0 5 0 1 1 0 48 152 4 236
>=16 79 0 0 0 2 5 1 1 0 0 14 0 1 0 0 7 650 16 776
Total 669 20 71 100 171 397 337 431 484 269 953 151 336 90 63 423 1035 36 6036
Note: Figures are based on sample observations

1 The survey is conducted at bi-monthly intervals by the Reserve Bank; it provides directional information on near-term inflationary pressures as expected by respondents and may reflect their own consumption patterns. Hence, survey results reflect respondents’ views, which are not necessarily shared by the Reserve Bank.

2 All estimates of inflation expectations are given in the form of median, unless stated otherwise.

3 Results of the previous survey round were released on the Bank’s website on October 06, 2023. Unit-level data for previous rounds of the survey are available on the Bank’s ‘Database on Indian Economy’ (DBIE) portal (weblink: https://dbie.rbi.org.in/#/dbie/home) under the head ‘Unit-level Data’.

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