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Date : Sep 30, 2022
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the September 2022 round of the Inflation Expectations Survey of Households (IESH)1 2. The survey was conducted during September 1 to 10, 2022 in 19 major cities. The results are based on responses from 6,052 urban households.

Highlights:

  1. Households’ median inflation perceptions for the current period increased by 90 basis points (bps) since July 2022 to 10.2 per cent in September 2022, while it rose by 50 bps each for both three months and one year ahead [Charts 1a and 1b; Table 3].

  2. Most categories of respondents expect higher inflation for both three months and one year ahead periods [Table 2].

  3. A larger share of households expects higher prices for all product groups as compared to the previous round of the survey [Tables 1(a) and 1(b)].

  4. Overall prices and inflation expectations for three months ahead period were generally aligned with food products, non-food products and cost of services, while they were more aligned with non-food products and cost of services for the longer horizon of one year [Table 4].

Chart 1a. Median Inflation Rate and Chart 1b. Median Inflation Rate -Perception and One Year ahead Expectation

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 Sep-21 Mar-22 May-22 Jul-22 Sep-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 84.9 0.76 89.9 0.64 88.5 0.69 83.1 0.80 85.0 0.77
Price increase more than current rate 61.5 1.14 67.2 1.27 66.1 1.10 58.7 1.21 59.9 1.14
Price increase similar to current rate 19.9 0.88 19.3 0.96 18.9 0.83 21.1 0.97 20.9 0.85
Price increase less than current rate 3.5 0.40 3.5 0.45 3.5 0.37 3.3 0.36 4.2 0.44
No changes in prices 12.9 0.71 8.6 0.59 9.1 0.62 13.7 0.74 12.6 0.70
Decline in prices 2.2 0.29 1.5 0.22 2.3 0.32 3.2 0.38 2.4 0.33
Food Product                    
Prices will increase 84.8 0.73 89.6 0.62 88.4 0.66 83.7 0.77 85.3 0.69
Price increase more than current rate 61.3 1.08 68.2 1.14 65.6 1.04 59.6 1.13 61.9 1.09
Price increase similar to current rate 18.3 0.80 16.2 0.88 17.4 0.78 18.9 0.90 17.4 0.75
Price increase less than current rate 5.3 0.50 5.2 0.48 5.4 0.44 5.2 0.45 6.1 0.49
No changes in prices 10.7 0.64 6.9 0.51 7.1 0.51 10.1 0.64 9.3 0.55
Decline in prices 4.4 0.40 3.5 0.36 4.5 0.43 6.1 0.52 5.4 0.45
Non- Food Product                    
Prices will increase 82.1 0.81 88.4 0.63 87.5 0.70 80.8 0.84 82.3 0.74
Price increase more than current rate 58.7 1.14 65.6 1.17 64.5 1.05 55.7 1.14 55.8 1.08
Price increase similar to current rate 18.3 0.82 17.6 0.87 17.9 0.79 19.8 0.89 20.5 0.79
Price increase less than current rate 5.1 0.44 5.2 0.49 5.1 0.44 5.2 0.45 6.0 0.48
No changes in prices 13.6 0.72 8.7 0.56 8.2 0.54 13.2 0.72 13.1 0.67
Decline in prices 4.3 0.42 2.9 0.31 4.2 0.43 6.0 0.49 4.6 0.42
Household Durables                    
Prices will increase 67.3 0.96 73.5 0.89 74.7 0.93 68.7 0.95 70.2 0.89
Price increase more than current rate 46.4 1.08 51.9 1.20 53.4 1.13 46.6 1.11 48.0 1.03
Price increase similar to current rate 16.3 0.77 16.0 0.83 16.3 0.78 17.3 0.81 16.8 0.70
Price increase less than current rate 4.6 0.43 5.5 0.50 5.1 0.42 4.8 0.44 5.3 0.45
No changes in prices 25.0 0.86 20.4 0.83 19.7 0.82 23.7 0.88 22.8 0.84
Decline in prices 7.7 0.53 6.1 0.44 5.5 0.44 7.6 0.54 7.1 0.50
Cost of Housing                    
Prices will increase 68.8 0.95 75.8 0.94 78.5 0.90 74.8 0.88 75.7 0.92
Price increase more than current rate 49.6 1.07 54.9 1.23 59.4 1.11 54.2 1.10 53.2 1.07
Price increase similar to current rate 15.2 0.77 16.6 0.80 15.4 0.73 16.9 0.77 17.7 0.70
Price increase less than current rate 3.9 0.42 4.3 0.40 3.7 0.35 3.7 0.37 4.8 0.42
No changes in prices 21.8 0.85 18.9 0.86 17.1 0.82 20.3 0.82 20.2 0.88
Decline in prices 9.4 0.58 5.4 0.46 4.3 0.40 4.8 0.44 4.1 0.39
Cost of Services                    
Prices will increase 73.3 0.93 76.3 0.88 78.5 0.88 71.7 0.93 72.2 0.91
Price increase more than current rate 52.1 1.09 54.5 1.19 56.4 1.09 48.6 1.12 49.4 1.10
Price increase similar to current rate 16.9 0.75 16.8 0.80 17.4 0.71 19.0 0.88 17.9 0.75
Price increase less than current rate 4.4 0.41 5.0 0.47 4.8 0.42 4.1 0.41 5.0 0.41
No changes in prices 23.7 0.90 21.2 0.86 18.6 0.82 24.8 0.92 24.7 0.87
Decline in prices 3.0 0.33 2.4 0.29 2.8 0.32 3.4 0.38 3.1 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 1(b): Product-wise Expectations of Prices for One Year ahead
(Percentage of Respondents)
Survey period ended Sep-21 Mar-22 May-22 Jul-22 Sep-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 87.6 0.72 91.5 0.58 91.3 0.60 88.4 0.70 90.8 0.59
Price increase more than current rate 66.3 1.09 71.0 1.19 70.8 1.07 66.2 1.23 68.1 1.12
Price increase similar to current rate 18.1 0.85 17.4 0.93 17.3 0.82 19.3 1.00 19.3 0.88
Price increase less than current rate 3.3 0.36 3.1 0.41 3.1 0.36 2.8 0.32 3.5 0.38
No changes in prices 9.4 0.61 6.1 0.48 5.8 0.47 8.1 0.61 6.6 0.49
Decline in prices 3.0 0.35 2.4 0.29 2.8 0.36 3.4 0.41 2.5 0.34
Food Product                    
Prices will increase 81.5 0.79 85.3 0.72 86.7 0.72 83.5 0.76 86.4 0.67
Price increase more than current rate 57.2 1.11 60.9 1.19 62.8 1.10 58.1 1.18 60.5 1.09
Price increase similar to current rate 19.6 0.89 19.6 0.91 19.2 0.82 21.3 0.98 21.0 0.84
Price increase less than current rate 4.7 0.45 4.8 0.47 4.7 0.41 4.1 0.40 4.9 0.42
No changes in prices 11.9 0.65 9.8 0.59 8.1 0.52 10.5 0.65 8.3 0.52
Decline in prices 6.6 0.47 5.0 0.41 5.2 0.48 6.0 0.55 5.3 0.45
Non- Food Product                    
Prices will increase 81.4 0.81 85.8 0.73 87.0 0.72 83.6 0.78 86.0 0.69
Price increase more than current rate 57.8 1.12 62.4 1.18 63.7 1.09 58.9 1.16 59.8 1.09
Price increase similar to current rate 19.5 0.84 18.9 0.89 19.1 0.82 20.8 0.92 20.9 0.83
Price increase less than current rate 4.1 0.40 4.5 0.44 4.3 0.40 3.9 0.38 5.4 0.45
No changes in prices 13.3 0.71 9.7 0.60 8.2 0.54 10.9 0.68 9.5 0.56
Decline in prices 5.3 0.42 4.5 0.40 4.7 0.47 5.4 0.54 4.4 0.41
Household Durables                    
Prices will increase 71.4 0.98 77.3 0.84 78.7 0.84 75.5 0.84 77.7 0.79
Price increase more than current rate 49.3 1.09 54.1 1.16 56.4 1.09 52.2 1.12 54.1 1.06
Price increase similar to current rate 17.5 0.83 18.3 0.89 17.4 0.75 19.3 0.88 18.9 0.79
Price increase less than current rate 4.5 0.45 4.8 0.48 4.9 0.42 4.0 0.39 4.6 0.41
No changes in prices 22.4 0.89 17.1 0.74 15.9 0.72 18.3 0.78 16.4 0.70
Decline in prices 6.2 0.46 5.6 0.43 5.3 0.46 6.1 0.49 6.0 0.45
Cost of Housing                    
Prices will increase 76.4 0.87 83.1 0.75 85.3 0.72 83.4 0.75 85.8 0.67
Price increase more than current rate 55.1 1.08 61.1 1.17 64.2 1.07 61.4 1.14 61.8 1.04
Price increase similar to current rate 16.8 0.80 17.6 0.88 17.2 0.77 18.6 0.87 19.6 0.79
Price increase less than current rate 4.5 0.42 4.5 0.43 4.0 0.38 3.4 0.36 4.5 0.41
No changes in prices 17.4 0.78 13.2 0.67 10.5 0.60 12.4 0.67 10.6 0.58
Decline in prices 6.2 0.47 3.7 0.36 4.1 0.40 4.1 0.42 3.6 0.38
Cost of Services                    
Prices will increase 79.8 0.84 83.0 0.79 84.9 0.78 81.1 0.84 84.2 0.74
Price increase more than current rate 56.6 1.14 59.2 1.25 62.2 1.10 57.4 1.17 58.6 1.08
Price increase similar to current rate 18.9 0.85 18.8 0.93 17.8 0.78 19.9 0.95 21.0 0.81
Price increase less than current rate 4.3 0.43 5.0 0.47 4.9 0.42 3.9 0.39 4.6 0.43
No changes in prices 16.6 0.76 14.1 0.71 12.0 0.67 15.0 0.80 12.9 0.65
Decline in prices 3.6 0.38 3.0 0.32 3.0 0.38 3.8 0.45 2.9 0.37
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: Sep-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 10.4 0.10 10.2 0.05 11.3 0.10 10.8 0.09 11.1 0.12 11.0 0.23
Gender-wise                        
Male 10.7 0.13 10.3 0.06 11.5 0.13 10.9 0.22 11.2 0.15 11.4 0.48
Female 10.2 0.15 10.1 0.09 11.2 0.15 10.7 0.12 11.0 0.18 10.9 0.19
Category-wise                        
Financial Sector Employees 9.3 0.49 9.4 0.66 10.0 0.49 10.0 0.66 10.0 0.61 10.2 0.56
Other Employees 10.7 0.19 10.3 0.09 11.5 0.18 11.0 0.31 11.4 0.22 11.6 0.56
Self Employed 11.1 0.21 10.5 0.09 11.8 0.20 11.7 0.62 11.4 0.26 12.2 0.70
Homemaker 10.1 0.17 10.0 0.19 11.2 0.17 10.7 0.13 10.9 0.21 10.9 0.25
Retired Persons 11.6 0.33 10.8 0.26 12.5 0.32 13.7 1.07 12.1 0.39 13.9 1.19
Daily Workers 10.4 0.27 10.2 0.18 11.6 0.26 11.3 0.60 11.0 0.33 11.6 0.58
Other category 9.5 0.23 9.2 0.43 10.6 0.22 10.3 0.17 10.6 0.28 10.5 0.21
Age Group-wise                        
Up to 25 years 9.5 0.19 9.1 0.35 10.5 0.19 10.1 0.19 10.7 0.22 10.4 0.16
25 to 30 years 10.0 0.21 9.8 0.35 10.9 0.21 10.6 0.16 10.7 0.25 10.8 0.29
30 to 35 years 10.4 0.22 10.1 0.16 11.2 0.21 10.8 0.26 11.4 0.23 11.4 0.54
35 to 40 years 10.3 0.20 10.2 0.10 11.4 0.20 10.9 0.23 10.8 0.25 10.9 0.25
40 to 45 years 10.7 0.24 10.3 0.13 11.6 0.24 11.1 0.45 11.4 0.27 11.8 0.56
45 to 50 years 10.8 0.25 10.4 0.10 11.6 0.24 11.1 0.44 10.9 0.31 11.4 0.65
50 to 55 years 11.2 0.31 10.6 0.10 12.1 0.30 12.0 1.06 11.8 0.37 13.2 1.00
55 to 60 years 11.0 0.29 10.5 0.21 11.8 0.31 12.0 1.01 11.3 0.38 12.3 0.99
60 years and above 11.5 0.29 10.7 0.16 12.4 0.28 13.3 1.10 12.1 0.33 13.4 1.10
City-wise                        
Ahmedabad 11.2 0.52 10.5 0.55 12.3 0.55 12.9 1.72 12.2 0.50 13.6 1.69
Bengaluru 10.3 0.33 10.4 0.13 11.6 0.30 12.1 1.03 11.5 0.32 13.5 1.01
Bhopal 9.1 0.82 8.2 1.68 10.0 0.86 9.7 1.11 9.8 0.83 10.0 1.14
Bhubaneswar 8.7 0.55 8.7 1.48 10.9 0.53 10.6 1.03 10.4 0.66 10.7 0.90
Chennai 10.3 0.38 10.3 0.32 11.7 0.40 12.3 1.44 12.0 0.44 13.6 1.72
Delhi 11.1 0.25 10.5 0.11 11.9 0.26 12.0 0.75 11.6 0.32 12.7 1.00
Guwahati 7.3 0.43 7.0 0.52 7.8 0.64 7.4 0.54 8.5 0.75 8.3 0.57
Hyderabad 10.6 0.51 10.3 0.32 11.2 0.48 10.9 0.58 10.6 0.55 11.4 1.06
Jaipur 8.7 0.51 8.2 0.53 9.4 0.46 9.1 0.60 9.1 0.38 9.2 0.61
Jammu 11.8 0.69 11.4 1.42 11.3 1.29 12.1 2.32 10.1 1.58 11.5 2.21
Kolkata 10.5 0.28 10.2 0.24 11.5 0.25 10.9 0.42 11.3 0.25 11.0 0.45
Lucknow 10.2 0.49 9.8 0.62 10.7 0.48 10.4 0.31 10.7 0.60 10.8 0.54
Mumbai 10.8 0.20 10.1 0.24 11.7 0.22 10.9 0.35 10.9 0.27 10.9 0.35
Nagpur 10.3 0.55 9.8 0.66 11.6 0.58 11.5 1.36 11.5 0.73 12.6 1.55
Patna 9.0 0.64 8.5 0.70 9.6 0.69 9.0 0.62 9.9 0.71 9.6 0.59
Thiruvananthapuram 6.6 0.51 5.5 0.37 8.3 0.63 7.4 0.71 9.7 0.65 9.5 0.87
Chandigarh 12.0 0.58 12.4 2.27 12.1 0.58 12.6 1.89 11.5 0.69 12.5 1.95
Ranchi 8.1 0.57 7.4 0.49 8.6 0.57 8.1 0.57 7.8 0.60 8.1 0.78
Raipur 7.2 0.65 6.6 0.92 7.7 0.81 7.3 1.36 8.0 1.19 8.3 2.63
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
Sep-21 10.4 0.11 10.2 0.06 11.4 0.11 10.8 0.11 10.8 0.13 10.9 0.14
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
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
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
Sep-21 68.8 69.1 59.5 60.2 66.7
Mar-22 70.5 70.8 60.2 62.0 65.8
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
One Year Ahead
Sep-21 71.3 72.9 64.9 67.1 73.8
Mar-22 73.1 74.2 67.5 69.4 74.4
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
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: Sep-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 4 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6
1-<2 2 15 13 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 31
2-<3 2 7 66 39 28 10 4 2 0 0 1 0 0 0 0 0 0 0 159
3-<4 0 3 5 56 41 43 14 2 0 2 0 0 0 0 0 0 0 0 166
4-<5 0 2 4 5 65 47 26 6 5 2 1 0 1 0 0 0 0 0 164
5-<6 1 1 14 15 22 267 122 150 89 14 101 1 1 1 0 5 8 0 812
6-<7 0 1 2 2 3 8 120 66 54 19 17 2 1 0 0 0 0 0 295
7-<8 0 0 0 3 6 8 12 165 122 66 76 3 3 3 1 2 2 0 472
8-<9 0 0 2 4 7 4 6 7 191 90 127 16 20 2 3 5 6 2 492
9-<10 0 0 0 0 3 2 2 4 6 83 56 26 20 7 0 2 3 0 214
10-<11 0 0 3 1 2 29 5 10 18 10 430 89 180 59 20 289 108 0 1253
11-<12 0 0 0 0 0 0 0 0 0 1 0 14 10 4 5 4 3 1 42
12-<13 0 0 0 1 2 5 1 0 2 0 5 0 51 8 20 27 16 1 139
13-<14 0 0 0 1 0 0 0 0 0 0 0 0 0 10 2 12 2 0 27
14-<15 0 0 0 0 0 0 0 0 0 0 0 0 0 1 10 8 15 1 35
15-<16 0 0 0 0 0 7 0 1 3 0 13 0 3 2 0 135 244 4 412
>=16 1 0 3 0 0 13 0 1 2 1 23 1 1 1 2 21 1260 3 1333
Total 10 29 114 128 179 443 312 414 492 288 850 152 291 98 63 510 1667 12 6052

Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: Sep-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 3 1 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6
1-<2 8 6 9 5 2 0 0 0 0 0 0 0 0 0 0 0 1 0 31
2-<3 27 3 34 31 29 17 9 2 5 0 1 0 1 0 0 0 0 0 159
3-<4 18 0 3 33 20 51 18 9 6 4 3 0 1 0 0 0 0 0 166
4-<5 16 0 2 3 32 42 34 13 13 4 1 1 1 0 0 1 1 0 164
5-<6 77 0 1 4 14 162 72 132 89 26 183 7 12 1 1 15 16 0 812
6-<7 25 0 0 2 2 5 59 50 68 32 29 6 10 2 1 4 0 0 295
7-<8 40 0 0 2 2 3 2 95 103 72 93 13 19 8 4 9 7 0 472
8-<9 46 0 0 0 4 3 3 9 101 86 130 27 47 7 8 9 11 1 492
9-<10 16 0 0 0 0 0 2 2 6 54 52 27 23 11 6 11 4 0 214
10-<11 120 0 0 0 0 12 4 4 10 4 280 45 151 51 31 261 278 2 1253
11-<12 3 0 0 0 0 0 0 0 0 0 0 8 9 6 3 6 5 2 42
12-<13 16 0 0 0 0 1 0 1 2 1 3 0 32 6 16 29 30 2 139
13-<14 1 0 0 0 0 0 0 0 0 0 0 1 0 7 2 11 5 0 27
14-<15 4 0 0 0 0 0 0 0 0 0 0 0 0 0 3 4 24 0 35
15-<16 34 0 0 0 0 1 0 2 1 0 4 0 3 2 0 84 280 1 412
>=16 107 0 0 0 0 2 1 1 0 0 11 0 1 0 1 17 1183 9 1333
Total 561 10 51 80 105 299 204 320 404 283 790 135 310 101 76 461 1845 17 6052
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 August 5, 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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