The Inflation Expectations Survey of Households for April-June 2014 quarter (36th round) captures the inflation expectations of 4,931 urban households across 16 cities, for the next three-month and the next one-year period. These expectations are based on their individual consumption baskets and hence these rates should not be considered as predictors of any official measure of inflation. The households’ inflation expectations provide useful directional information on near-term inflationary pressures and also supplement other economic indicators to get a better indication of future inflation.
Highlights:
-
In terms of qualitative response, the proportion of respondents expecting price rise by ‘more than current rate’ for overall prices as well as prices of all product groups have decreased as compared with the previous round of survey for both three-month ahead period and one-year ahead period.
-
In terms of quantitative response, current perceived median inflation rate is 13.3 per cent, whereas median inflation expectations are 14.0 per cent for three-month ahead period and 15.0 per cent for one-year ahead period.
-
The short-term inflation expectations in terms of median for next three months witnessed marginal increase whereas for the one-year ahead inflation expectations decreased marginally as compared to March 2014.
-
The proportion of respondents expecting double digit inflation in next three-month period have declined marginally to about 72.0 per cent (75.0 per cent in the March 2014 round) and for the next one year period to 74.0 per cent (77.0 per cent in the March 2014 round).
-
The survey shows that retired persons and daily workers have marginally higher level of inflation expectations based on median inflation rates. Respondents from Chennai, Guwahati, Lucknow and Nagpur cities have relatively higher expectation for inflation.
Table 1: Respondents’ Profile (Category): Share in Total Sample |
Category of Respondents |
Share in Total (%) |
Target Share (%) |
Financial Sector Employees |
10.0 |
10 |
Other Employees |
15.4 |
15 |
Self-employed |
20.1 |
20 |
Housewives |
29.6 |
30 |
Retired Persons |
9.4 |
10 |
Daily Workers |
10.0 |
10 |
Others |
5.6 |
5 |
Note: The above sample proportion is for the quarter ended June 2014 survey. |
Table 2: Product-wise Expectations of Prices for Three-month ahead and One-year ahead |
(Percentage of respondents) |
Round No./survey period |
33 |
34 |
35 |
36 |
33 |
34 |
35 |
36 |
(Round ended) → |
Sep-13 |
Dec-13 |
Mar-14 |
Jun-14 |
Sep-13 |
Dec-13 |
Mar-14 |
Jun-14 |
Options: General |
Three-month ahead |
One-year ahead |
Prices will increase |
87.3 |
86.8 |
89.2 |
77.5 |
92.5 |
92.7 |
94.1 |
83.6 |
Price increase more than current rate |
74.5 |
55.3 |
51.2 |
41.2 |
76.6 |
61.1 |
59.0 |
47.4 |
Price increase similar to current rate |
11.3 |
24.0 |
28.4 |
21.5 |
13.0 |
25.1 |
25.7 |
22.0 |
Price increase less than current rate |
1.5 |
7.5 |
9.6 |
14.8 |
2.9 |
6.5 |
9.3 |
14.2 |
No change in prices |
7.8 |
9.5 |
8.3 |
12.7 |
4.6 |
4.0 |
3.5 |
7.4 |
Decline in price |
4.9 |
3.7 |
2.5 |
9.8 |
2.9 |
3.3 |
2.4 |
9.0 |
Options: Food Product |
Three-month ahead |
One-year ahead |
Prices will increase |
84.3 |
84.8 |
88.6 |
77.2 |
89.0 |
91.5 |
93.8 |
82.8 |
Price increase more than current rate |
72.5 |
50.9 |
51.9 |
42.3 |
74.8 |
58.5 |
57.6 |
47.0 |
Price increase similar to current rate |
10.6 |
25.5 |
26.3 |
21.5 |
11.5 |
26.2 |
26.3 |
21.3 |
Price increase less than current rate |
1.3 |
8.4 |
10.4 |
13.4 |
2.7 |
6.8 |
9.9 |
14.5 |
No change in prices |
10.1 |
9.9 |
8.7 |
13.9 |
7.1 |
5.0 |
4.0 |
7.9 |
Decline in price |
5.6 |
5.3 |
2.7 |
8.9 |
3.9 |
3.6 |
2.2 |
9.3 |
Options: Non-Food Product |
Three-month ahead |
One-year ahead |
Prices will increase |
77.5 |
78.8 |
80.6 |
73.1 |
80.9 |
87.5 |
87.5 |
79.5 |
Price increase more than current rate |
66.1 |
44.6 |
42.5 |
37.3 |
67.8 |
50.4 |
48.1 |
42.0 |
Price increase similar to current rate |
10.3 |
25.4 |
27.2 |
21.7 |
11.4 |
28.5 |
28.5 |
22.3 |
Price increase less than current rate |
1.2 |
8.8 |
10.8 |
14.1 |
1.7 |
8.5 |
10.8 |
15.3 |
No change in prices |
18.0 |
17.7 |
16.5 |
18.9 |
14.4 |
9.4 |
9.7 |
12.7 |
Decline in price |
4.5 |
3.6 |
3.0 |
8.0 |
4.7 |
3.2 |
2.9 |
7.8 |
Options: Household Durables |
Three-month ahead |
One-year ahead |
Prices will increase |
73.6 |
75.0 |
70.5 |
68.9 |
80.1 |
84.4 |
81.5 |
76.9 |
Price increase more than current rate |
63.2 |
42.0 |
35.4 |
35.3 |
67.9 |
49.1 |
44.2 |
42.1 |
Price increase similar to current rate |
9.2 |
24.0 |
23.1 |
20.0 |
10.7 |
26.2 |
25.6 |
20.7 |
Price increase less than current rate |
1.2 |
9.0 |
12.0 |
13.6 |
1.5 |
9.2 |
11.7 |
14.1 |
No change in prices |
19.7 |
19.4 |
21.1 |
20.9 |
14.6 |
10.9 |
12.4 |
13.9 |
Decline in price |
6.6 |
5.6 |
8.4 |
10.2 |
5.4 |
4.6 |
6.0 |
9.2 |
Options: Housing Prices |
Three-month ahead |
One-year ahead |
Prices will increase |
81.9 |
89.2 |
85.5 |
82.2 |
87.3 |
93.6 |
91.6 |
87.2 |
Price increase more than current rate |
74.5 |
66.9 |
58.0 |
55.4 |
78.9 |
71.0 |
66.2 |
59.7 |
Price increase similar to current rate |
6.9 |
17.9 |
21.1 |
17.0 |
7.6 |
18.5 |
19.2 |
17.8 |
Price increase less than current rate |
0.5 |
4.4 |
6.4 |
9.8 |
0.8 |
4.1 |
6.3 |
9.7 |
No change in prices |
11.9 |
8.1 |
10.2 |
11.1 |
7.5 |
3.8 |
4.4 |
6.0 |
Decline in price |
6.2 |
2.8 |
4.4 |
6.7 |
5.3 |
2.6 |
4.0 |
6.8 |
Options: Cost of Services |
Three-month ahead |
One-year ahead |
Prices will increase |
74.9 |
82.2 |
83.1 |
78.5 |
82.8 |
89.9 |
90.4 |
84.9 |
Price increase more than current rate |
63.5 |
49.7 |
48.0 |
46.4 |
68.8 |
56.2 |
54.8 |
50.6 |
Price increase similar to current rate |
10.5 |
25.7 |
26.5 |
19.4 |
11.8 |
26.3 |
25.4 |
20.7 |
Price increase less than current rate |
0.9 |
6.8 |
8.7 |
12.6 |
2.2 |
7.4 |
10.2 |
13.6 |
No change in prices |
20.6 |
15.3 |
14.5 |
16.2 |
13.2 |
7.6 |
7.2 |
9.3 |
Decline in price |
4.5 |
2.5 |
2.4 |
5.3 |
3.9 |
2.6 |
2.4 |
5.8 |
Table 3: Households Expecting General Price Movements in Coherence with Movements in Price
Expectations of Various Product Groups: Three-month ahead and One-year ahead |
(Percentage of respondents) |
Round No. |
Survey period ended |
Food |
Non-Food |
Households durables |
Housing |
Cost of services |
Three-month Ahead period |
33 |
Sep-13 |
77.9 |
69.2 |
65.9 |
69.4 |
64.2 |
34 |
Dec-13 |
72.5 |
61.9 |
56.1 |
59.8 |
60.1 |
35 |
Mar-14 |
72.0 |
61.6 |
51.7 |
60.3 |
60.8 |
36 |
Jun-14 |
67.8 |
57.8 |
54.0 |
53.1 |
55.2 |
One-year Ahead period |
33 |
Sep-13 |
81.6 |
73.2 |
70.9 |
74.8 |
71.8 |
34 |
Dec-13 |
77.8 |
68.8 |
65.2 |
66.7 |
70.0 |
35 |
Mar-14 |
77.9 |
67.7 |
61.3 |
69.4 |
69.9 |
36 |
Jun-14 |
74.0 |
66.5 |
64.3 |
62.1 |
65.1 |
Table 4: Household Inflation Expectations -Current, Three-month Ahead and One-year Ahead |
Survey Round |
Survey period Ended |
Inflation rate in Per cent |
Current |
Three-month ahead |
One-year ahead |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
33 |
Sep-13 |
11.8 |
11.0 |
4.3 |
12.8 |
14.5 |
4.0 |
13.5 |
16.0 |
4.0 |
34 |
Dec-13 |
12.3 |
13.2 |
4.4 |
12.2 |
13.9 |
4.7 |
13.5 |
16.0 |
4.0 |
35 |
Mar-14 |
12.2 |
13.3 |
4.3 |
12.3 |
12.9 |
4.1 |
13.1 |
15.3 |
4.3 |
36 |
Jun-14 |
12.6 |
13.3 |
4.0 |
12.5 |
14.0 |
4.4 |
12.8 |
15.0 |
4.3 |
Table 5: Factors that Explain the Total Variability |
Round No. |
Survey period
ended |
Current |
Three-month ahead |
One-year ahead |
33 |
Sep-13 |
City, Age group |
City, Age group |
City |
34 |
Dec-13 |
City, Gender, Age-group |
City, Category |
City, Category |
35 |
Mar-14 |
City, Category, Gender, Age-group |
City, Category, Gender |
City, Category, Gender |
36 |
Jun-14 |
City |
City |
City |
Note: Results based on exercise using Analysis of Variance. |
Table 6: Various Group-wise Inflation Expectations for June- 2014 Survey Round |
|
Current |
Three-month Ahead |
One-year Ahead |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev |
Gender-wise |
Male |
12.6 |
13.3 |
3.9 |
12.5 |
14.0 |
4.3 |
12.8 |
14.8 |
4.3 |
Female |
12.4 |
13.3 |
4.2 |
12.5 |
14.0 |
4.4 |
12.9 |
15.2 |
4.3 |
Category-wise |
Financial Sector Employees |
12.6 |
12.8 |
4.0 |
12.4 |
13.3 |
4.3 |
13 |
14.7 |
4.0 |
Other Employees |
12.5 |
12.9 |
4.0 |
12.3 |
13.6 |
4.4 |
12.6 |
14.8 |
4.5 |
Self Employed |
12.7 |
13.5 |
3.9 |
12.5 |
14.3 |
4.5 |
12.9 |
15.0 |
4.2 |
Housewives |
12.6 |
14.1 |
4.2 |
12.5 |
14.2 |
4.4 |
12.8 |
15.2 |
4.3 |
Retired Persons |
12.9 |
14.5 |
3.9 |
12.9 |
14.9 |
4.2 |
12.9 |
15.2 |
4.4 |
Daily Workers |
12.6 |
12.9 |
3.9 |
12.8 |
14.5 |
4.2 |
13.1 |
15.4 |
4.3 |
Other category |
11.8 |
10.8 |
4.0 |
11.8 |
12.6 |
4.5 |
12.3 |
13.4 |
4.4 |
Age-wise |
Up to 25 years |
11.8 |
10.9 |
4.1 |
12.1 |
13.0 |
4.4 |
12.5 |
14.2 |
4.3 |
25 to 30 years |
12.5 |
12.8 |
4.1 |
12.6 |
14.3 |
4.3 |
12.9 |
15.1 |
4.3 |
30 to 35 years |
12.7 |
14.0 |
3.9 |
12.7 |
14.0 |
4.2 |
12.8 |
15.0 |
4.3 |
35 to 40 years |
12.5 |
12.8 |
4.0 |
12.4 |
14.1 |
4.5 |
12.7 |
14.8 |
4.3 |
40 to 45 years |
13.0 |
14.7 |
3.9 |
12.5 |
14.3 |
4.4 |
13.1 |
15.1 |
4.1 |
45 to 50 years |
12.7 |
14.4 |
4.1 |
12.5 |
14.8 |
4.5 |
13.0 |
15.6 |
4.3 |
50 to 55 years |
12.6 |
14.3 |
4.1 |
12.1 |
13.5 |
4.5 |
12.4 |
14.5 |
4.6 |
55 to 60 years |
12.8 |
14.0 |
3.9 |
12.7 |
14.2 |
4.1 |
13.4 |
15.7 |
4.0 |
60 years and above |
13.3 |
15.4 |
3.8 |
12.8 |
14.8 |
4.1 |
13.0 |
15.6 |
4.4 |
City-wise |
Mumbai |
9.5 |
9.7 |
3.0 |
9.6 |
8.9 |
3.8 |
9.8 |
9.3 |
3.7 |
Delhi |
13.4 |
14.1 |
3.1 |
14.4 |
15.7 |
2.8 |
14.8 |
16.1 |
2.8 |
Chennai |
13.9 |
16.2 |
4.2 |
14.3 |
16.3 |
4.0 |
14.0 |
16.3 |
4.2 |
Kolkata |
13.6 |
16.0 |
3.6 |
13.5 |
16.1 |
4.3 |
13.6 |
16.1 |
3.8 |
Bangalore |
8.9 |
9.0 |
4.8 |
7.7 |
6.5 |
5.0 |
10.9 |
10.4 |
4.3 |
Hyderabad |
10.4 |
10.0 |
2.4 |
12.0 |
12.0 |
3.3 |
12.1 |
12.0 |
3.2 |
Ahmadabad |
11.8 |
12.9 |
4.5 |
12.0 |
13.3 |
4.4 |
12.6 |
14.4 |
4.2 |
Lucknow |
15.8 |
16.4 |
2.1 |
14.8 |
16.3 |
3.4 |
14.1 |
16.2 |
4.2 |
Jaipur |
12.5 |
14.2 |
4.0 |
11.2 |
11.4 |
5.2 |
12.3 |
14.1 |
4.6 |
Bhopal |
10.4 |
10.3 |
3.7 |
11.3 |
12.1 |
4.1 |
11.7 |
12.3 |
4.5 |
Patna |
11.3 |
10.7 |
2.2 |
12.3 |
12.7 |
3.0 |
11.9 |
11.2 |
3.0 |
Guwahati |
14.4 |
16.2 |
3.8 |
14.3 |
16.2 |
3.7 |
13.0 |
16.1 |
5.3 |
Thiruvananthapuram |
15.4 |
16.2 |
2.0 |
11.8 |
10.9 |
4.1 |
15.5 |
16.3 |
2.5 |
Bhubaneswar |
11.6 |
10.7 |
3.7 |
9.4 |
9.9 |
4.6 |
12.0 |
11.8 |
4.0 |
Nagpur |
14.6 |
16.2 |
3.2 |
15.0 |
16.2 |
2.9 |
14.6 |
16.3 |
3.5 |
Kolhapur |
13.5 |
16.1 |
4.0 |
13.8 |
16.1 |
3.6 |
12.1 |
16.0 |
5.8 |
All |
12.6 |
13.3 |
4.0 |
12.5 |
14.0 |
4.4 |
12.8 |
15.0 |
4.3 |
Table 7: Cross-tabulation of Current and Three-month Ahead Inflation Expectations |
(Number of respondents) |
|
Three-month 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 |
|
|
|
1 |
|
2 |
|
|
|
1 |
|
1 |
1 |
10 |
1-2 |
2 |
3 |
4 |
3 |
3 |
1 |
1 |
1 |
|
|
1 |
|
|
|
|
|
1 |
|
20 |
2-3 |
|
5 |
5 |
5 |
13 |
2 |
1 |
2 |
|
|
1 |
|
|
|
1 |
|
|
4 |
39 |
3-4 |
2 |
4 |
2 |
4 |
6 |
1 |
3 |
2 |
1 |
1 |
1 |
|
|
|
|
|
2 |
2 |
31 |
4-5 |
11 |
18 |
17 |
6 |
21 |
11 |
12 |
4 |
1 |
7 |
2 |
|
|
|
1 |
|
3 |
15 |
129 |
5-6 |
5 |
6 |
5 |
10 |
12 |
28 |
22 |
25 |
14 |
9 |
19 |
|
|
|
1 |
2 |
4 |
9 |
171 |
6-7 |
3 |
|
5 |
1 |
5 |
9 |
67 |
17 |
16 |
4 |
4 |
|
1 |
|
|
|
3 |
7 |
142 |
7-8 |
2 |
2 |
6 |
3 |
3 |
10 |
19 |
29 |
20 |
12 |
5 |
|
1 |
1 |
2 |
1 |
3 |
7 |
126 |
8-9 |
2 |
11 |
3 |
|
2 |
11 |
11 |
17 |
46 |
26 |
30 |
2 |
8 |
3 |
1 |
1 |
4 |
16 |
194 |
9-10 |
|
2 |
4 |
2 |
15 |
13 |
10 |
22 |
22 |
92 |
47 |
58 |
38 |
14 |
40 |
6 |
48 |
54 |
487 |
10-11 |
1 |
3 |
7 |
4 |
6 |
26 |
16 |
18 |
38 |
22 |
111 |
78 |
138 |
55 |
28 |
82 |
74 |
56 |
763 |
11-12 |
|
2 |
1 |
|
1 |
3 |
1 |
4 |
4 |
5 |
8 |
21 |
30 |
24 |
21 |
13 |
13 |
6 |
157 |
12-13 |
|
1 |
2 |
|
|
2 |
|
1 |
3 |
2 |
8 |
3 |
25 |
28 |
22 |
55 |
12 |
9 |
173 |
13-14 |
|
|
|
|
1 |
1 |
|
1 |
1 |
1 |
2 |
1 |
3 |
12 |
15 |
15 |
9 |
13 |
75 |
14-15 |
|
|
|
|
11 |
3 |
2 |
1 |
1 |
6 |
3 |
5 |
5 |
14 |
36 |
42 |
69 |
24 |
222 |
15-16 |
|
|
|
|
9 |
7 |
2 |
2 |
|
11 |
25 |
4 |
17 |
14 |
15 |
93 |
98 |
40 |
337 |
>=16 |
|
|
1 |
|
33 |
38 |
12 |
8 |
8 |
48 |
82 |
9 |
13 |
11 |
27 |
54 |
1317 |
194 |
1855 |
Total |
30 |
57 |
62 |
39 |
142 |
166 |
179 |
154 |
176 |
246 |
351 |
181 |
279 |
176 |
211 |
364 |
1661 |
457 |
4931 |
Note: The shaded cells represent the number of respondents who expressed double digit current and three-month ahead inflations. |
Table 8: Cross-tabulation of Current and One-year Ahead Inflation Expectations |
(Number of respondents) |
|
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 |
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
1 |
4 |
3 |
10 |
1-2 |
4 |
1 |
3 |
|
3 |
1 |
|
1 |
1 |
2 |
2 |
|
|
|
|
|
2 |
|
20 |
2-3 |
2 |
1 |
5 |
5 |
6 |
2 |
1 |
1 |
3 |
3 |
1 |
|
1 |
|
|
|
4 |
4 |
39 |
3-4 |
|
1 |
5 |
7 |
4 |
3 |
|
2 |
1 |
2 |
1 |
|
|
|
|
2 |
|
3 |
31 |
4-5 |
3 |
2 |
2 |
4 |
26 |
29 |
5 |
7 |
4 |
19 |
1 |
2 |
|
|
4 |
2 |
5 |
14 |
129 |
5-6 |
3 |
1 |
7 |
5 |
27 |
26 |
12 |
11 |
3 |
14 |
19 |
1 |
4 |
1 |
1 |
8 |
3 |
25 |
171 |
6-7 |
1 |
1 |
|
1 |
4 |
20 |
54 |
32 |
3 |
7 |
9 |
1 |
3 |
1 |
|
1 |
2 |
2 |
142 |
7-8 |
3 |
3 |
2 |
1 |
2 |
8 |
21 |
38 |
15 |
8 |
4 |
2 |
1 |
1 |
1 |
3 |
5 |
8 |
126 |
8-9 |
1 |
1 |
|
2 |
2 |
5 |
13 |
24 |
48 |
29 |
13 |
8 |
11 |
3 |
4 |
11 |
4 |
15 |
194 |
9-10 |
1 |
|
|
3 |
6 |
9 |
6 |
13 |
48 |
128 |
86 |
17 |
16 |
8 |
32 |
13 |
43 |
58 |
487 |
10-11 |
3 |
3 |
3 |
2 |
4 |
20 |
5 |
8 |
12 |
57 |
167 |
101 |
42 |
19 |
33 |
112 |
79 |
93 |
763 |
11-12 |
2 |
|
2 |
|
1 |
3 |
3 |
|
2 |
4 |
20 |
32 |
27 |
8 |
16 |
14 |
15 |
8 |
157 |
12-13 |
1 |
|
|
|
1 |
1 |
2 |
|
6 |
1 |
10 |
21 |
30 |
16 |
13 |
18 |
10 |
43 |
173 |
13-14 |
|
|
|
|
|
|
3 |
1 |
|
|
1 |
|
9 |
12 |
13 |
8 |
7 |
21 |
75 |
14-15 |
1 |
|
|
|
|
1 |
|
|
2 |
7 |
1 |
3 |
4 |
22 |
36 |
61 |
58 |
26 |
222 |
15-16 |
3 |
|
2 |
|
1 |
3 |
2 |
1 |
1 |
4 |
15 |
5 |
6 |
2 |
22 |
63 |
167 |
40 |
337 |
>=16 |
56 |
3 |
2 |
1 |
|
7 |
3 |
5 |
3 |
38 |
31 |
8 |
9 |
10 |
23 |
36 |
1433 |
187 |
1855 |
Total |
84 |
17 |
33 |
31 |
87 |
139 |
130 |
144 |
152 |
324 |
381 |
201 |
163 |
103 |
198 |
353 |
1841 |
550 |
4931 |
Note: The shaded cells represent the number of respondents who expressed double digit current and one-year ahead inflations. |
|