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Date : Apr 03, 2020
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the March 2020 round of the Inflation Expectations Survey of Households (IESH)1. The survey was conducted during February 27 – March 7, 2020 in 18 major cities and the results are based on responses from 5,912 urban households.

Highlights:

i. Households’ three months ahead and one year ahead median inflation expectations declined by 10 basis points and 20 basis points, respectively, in the March 2020 round of the survey in comparison with the previous survey round. However, their perception of current inflation remained around the same level as that in the January 2020 round (Chart 1a, Chart 1b & Table 2).

ii. The shares of households expecting general inflation to rise in the next three months and one year have declined noticeably compared to the January 2020 round (Table 1a & Table 1b).

Chart 1

Note: Please see the excel file for time series data.

Table 1(a): Product-wise Expectations of Prices for Three Months ahead
(Percentage of Respondents)
Survey period ended Mar-19 Sep-19 Nov-19 Jan-20 Mar-20
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 74.8 1.02 79.3 0.94 80.7 0.90 83.2 0.87 83.3 0.79
Price increase more than current rate 44.1 1.08 49.0 1.23 52.4 1.22 56.1 1.16 52.5 1.10
Price increase similar to current rate 26.9 0.97 25.1 1.04 23.4 0.96 23.4 0.91 25.6 0.99
Price increase less than current rate 3.8 0.41 5.2 0.51 4.9 0.55 3.6 0.37 5.2 0.56
No changes in prices 21.9 0.98 18.6 0.92 17.3 0.84 14.4 0.81 14.9 0.76
Decline in prices 3.4 0.36 2.1 0.29 1.9 0.26 2.4 0.31 1.8 0.25
Food Product                    
Prices will increase 73.7 0.96 81.4 0.86 81.8 0.80 81.7 0.80 81.9 0.81
Price increase more than current rate 43.6 1.06 52.9 1.14 54.8 1.14 56.0 1.11 55.4 1.02
Price increase similar to current rate 24.1 0.88 21.4 0.88 21.0 0.85 20.1 0.85 20.0 0.88
Price increase less than current rate 6.0 0.49 7.1 0.59 6.0 0.54 5.5 0.45 6.5 0.56
No changes in prices 17.5 0.84 13.2 0.78 12.3 0.65 11.2 0.67 12.4 0.68
Decline in prices 8.8 0.56 5.4 0.45 5.9 0.48 7.2 0.50 5.7 0.43
Non- Food Product                    
Prices will increase 71.3 0.94 74.7 0.95 75.3 0.93 77.8 0.91 77.8 0.87
Price increase more than current rate 41.0 1.02 45.5 1.16 48.0 1.14 51.4 1.15 50.8 1.00
Price increase similar to current rate 24.5 0.86 21.8 0.90 21.1 0.86 21.2 0.88 20.8 0.89
Price increase less than current rate 5.7 0.48 7.3 0.57 6.1 0.53 5.3 0.43 6.2 0.50
No changes in prices 21.9 0.87 20.8 0.88 20.5 0.83 17.7 0.82 17.7 0.79
Decline in prices 6.8 0.47 4.5 0.42 4.3 0.39 4.4 0.39 4.5 0.42
Household Durables                    
Prices will increase 59.5 1.05 56.2 1.07 55.2 1.09 60.3 1.02 64.5 1.02
Price increase more than current rate 35.2 0.99 33.9 1.11 35.4 1.06 37.9 1.03 42.3 1.03
Price increase similar to current rate 19.3 0.79 17.3 0.80 15.2 0.73 17.5 0.76 17.2 0.80
Price increase less than current rate 5.0 0.41 4.9 0.45 4.6 0.44 4.8 0.43 5.0 0.44
No changes in prices 27.7 0.96 28.5 0.96 29.1 0.93 26.8 0.91 24.2 0.90
Decline in prices 12.8 0.62 15.4 0.73 15.8 0.73 12.9 0.65 11.2 0.63
Cost of Housing                    
Prices will increase 68.1 0.98 68.1 1.10 68.5 1.09 69.7 1.04 71.0 1.07
Price increase more than current rate 44.2 0.97 45.2 1.23 48.3 1.19 48.4 1.10 49.5 1.10
Price increase similar to current rate 19.5 0.76 17.9 0.81 16.4 0.77 17.3 0.74 17.4 0.78
Price increase less than current rate 4.4 0.41 5.0 0.44 3.8 0.41 4.0 0.40 4.2 0.39
No changes in prices 22.4 0.88 23.1 0.98 24.0 0.99 22.0 0.95 22.1 0.96
Decline in prices 9.5 0.60 8.7 0.59 7.4 0.53 8.3 0.54 6.9 0.52
Cost of Services                    
Prices will increase 66.4 1.02 63.5 1.04 65.8 1.05 72.5 0.98 70.8 0.99
Price increase more than current rate 39.2 1.00 40.2 1.15 43.6 1.14 46.4 1.13 46.2 1.02
Price increase similar to current rate 21.9 0.84 18.1 0.76 17.7 0.79 21.1 0.81 19.3 0.84
Price increase less than current rate 5.3 0.45 5.3 0.45 4.5 0.46 4.9 0.43 5.2 0.44
No changes in prices 28.9 0.99 31.6 1.00 29.5 1.01 23.4 0.90 25.9 0.94
Decline in prices 4.7 0.42 4.8 0.42 4.7 0.43 4.1 0.38 3.3 0.34
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-19 Sep-19 Nov-19 Jan-20 Mar-20
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 84.4 0.90 87.0 0.78 89.1 0.71 88.1 0.74 89.2 0.65
Price increase more than current rate 54.6 1.08 57.3 1.29 64.0 1.25 63.6 1.13 60.7 1.07
Price increase similar to current rate 26.6 0.93 25.1 1.07 21.5 0.96 21.4 0.88 24.8 1.00
Price increase less than current rate 3.2 0.38 4.6 0.47 3.6 0.44 3.2 0.37 3.7 0.42
No changes in prices 12.6 0.83 10.6 0.73 8.9 0.64 9.5 0.67 9.0 0.62
Decline in prices 3.0 0.33 2.4 0.31 2.0 0.28 2.4 0.30 1.8 0.26
Food Product                    
Prices will increase 80.1 0.87 83.0 0.86 86.2 0.74 84.8 0.73 85.6 0.73
Price increase more than current rate 47.2 1.06 52.2 1.23 58.9 1.24 56.0 1.14 55.6 1.10
Price increase similar to current rate 28.0 0.88 25.4 0.96 22.4 0.90 24.3 0.93 24.3 0.93
Price increase less than current rate 5.0 0.44 5.4 0.53 5.0 0.49 4.5 0.40 5.7 0.49
No changes in prices 14.0 0.76 11.9 0.76 9.4 0.61 9.8 0.59 10.3 0.64
Decline in prices 5.9 0.45 5.2 0.43 4.4 0.39 5.4 0.42 4.1 0.37
Non- Food Product                    
Prices will increase 78.2 0.89 78.6 0.94 81.0 0.82 81.6 0.80 82.3 0.81
Price increase more than current rate 45.7 1.05 48.1 1.25 53.5 1.23 53.1 1.14 53.6 1.08
Price increase similar to current rate 27.5 0.89 24.4 0.98 22.6 0.92 23.5 0.88 23.4 0.92
Price increase less than current rate 5.0 0.41 6.1 0.52 4.9 0.51 5.1 0.44 5.3 0.47
No changes in prices 16.9 0.80 16.6 0.85 15.5 0.72 14.1 0.72 14.2 0.73
Decline in prices 5.0 0.41 4.8 0.43 3.6 0.36 4.3 0.39 3.4 0.36
Household Durables                    
Prices will increase 68.3 0.99 64.1 1.04 65.4 1.00 68.0 0.96 70.8 1.02
Price increase more than current rate 41.3 1.02 39.0 1.17 42.7 1.16 44.0 1.10 46.6 1.09
Price increase similar to current rate 22.6 0.81 19.4 0.82 18.1 0.80 20.0 0.80 19.8 0.86
Price increase less than current rate 4.4 0.41 5.6 0.49 4.6 0.46 4.0 0.40 4.4 0.42
No changes in prices 21.9 0.89 24.2 0.90 22.5 0.84 21.2 0.84 19.7 0.87
Decline in prices 9.8 0.57 11.8 0.64 12.1 0.62 10.7 0.60 9.5 0.59
Cost of Housing                    
Prices will increase 77.6 0.86 77.3 0.89 80.0 0.92 77.8 0.89 79.9 0.90
Price increase more than current rate 51.0 1.01 51.8 1.15 57.1 1.20 54.7 1.09 56.5 1.03
Price increase similar to current rate 22.9 0.77 20.6 0.85 19.1 0.85 19.0 0.83 19.6 0.82
Price increase less than current rate 3.8 0.36 4.8 0.45 3.9 0.41 4.1 0.39 3.8 0.39
No changes in prices 15.2 0.75 15.5 0.73 13.9 0.76 15.0 0.77 14.5 0.78
Decline in prices 7.2 0.53 7.2 0.53 6.1 0.48 7.2 0.50 5.5 0.47
Cost of Services                    
Prices will increase 78.8 0.87 79.0 0.93 80.9 0.87 82.5 0.79 81.4 0.85
Price increase more than current rate 47.5 1.02 50.0 1.23 53.7 1.23 54.6 1.15 53.0 1.09
Price increase similar to current rate 26.4 0.87 22.7 0.93 22.3 0.86 23.0 0.87 23.3 0.90
Price increase less than current rate 4.8 0.42 6.3 0.51 4.9 0.51 4.9 0.44 5.0 0.44
No changes in prices 17.4 0.81 17.2 0.85 15.9 0.77 14.6 0.72 16.0 0.81
Decline in prices 3.9 0.37 3.8 0.38 3.2 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 2: Inflation Expectations of Various Groups: March 2020
  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 8.4 0.09 7.6 0.12 9.2 0.10 8.5 0.11 9.1 0.11 9.0 0.18
Gender-wise                        
Male 8.5 0.12 7.6 0.15 9.2 0.13 8.4 0.14 9.1 0.15 8.9 0.21
Female 8.4 0.13 7.6 0.17 9.3 0.13 8.6 0.15 9.2 0.15 9.3 0.28
Category-wise                        
Financial Sector Employees 7.9 0.43 6.8 0.51 8.3 0.40 7.5 0.43 8.4 0.56 8.2 0.84
Other Employees 8.7 0.19 7.8 0.21 9.4 0.19 8.5 0.20 9.2 0.23 9.0 0.32
Self Employed 8.4 0.19 7.7 0.22 9.1 0.20 8.5 0.18 9.1 0.22 9.0 0.33
Homemaker 8.3 0.14 7.6 0.19 9.1 0.14 8.5 0.17 9.1 0.17 9.2 0.29
Retired Persons 9.3 0.33 8.4 0.36 9.8 0.33 9.3 0.51 9.4 0.39 9.2 0.57
Daily Workers 8.5 0.25 7.8 0.29 9.5 0.27 9.0 0.37 9.7 0.28 9.6 0.35
Other category 8.1 0.21 7.3 0.24 8.9 0.23 8.2 0.25 9.1 0.28 8.9 0.36
Age Group-wise                        
Up to 25 years 7.7 0.18 6.9 0.21 8.6 0.18 8.0 0.18 8.9 0.22 8.8 0.24
25 to 30 years 8.1 0.17 7.5 0.21 9.0 0.19 8.3 0.19 8.8 0.22 8.5 0.25
30 to 35 years 8.4 0.19 7.9 0.24 9.2 0.20 8.5 0.20 9.2 0.23 9.4 0.39
35 to 40 years 8.3 0.18 7.4 0.20 9.1 0.19 8.4 0.20 9.0 0.23 8.8 0.26
40 to 45 years 8.3 0.22 7.6 0.26 9.1 0.22 8.5 0.20 8.9 0.27 8.8 0.43
45 to 50 years 8.7 0.22 7.9 0.26 9.4 0.23 8.9 0.35 9.1 0.26 9.0 0.50
50 to 55 years 8.7 0.26 7.8 0.38 9.6 0.27 9.5 0.54 9.6 0.33 9.9 0.47
55 to 60 years 8.6 0.26 7.8 0.33 9.4 0.27 8.5 0.48 9.0 0.34 8.6 0.34
60 years and above 9.4 0.26 8.5 0.37 9.9 0.25 9.8 0.42 9.8 0.30 10.1 0.30
City-wise                        
Ahmedabad 9.2 0.35 8.3 0.59 10.4 0.35 10.0 0.60 9.6 0.37 9.9 0.53
Bengaluru 7.6 0.25 6.4 0.48 8.3 0.28 7.3 0.37 8.7 0.28 8.2 0.41
Bhopal 8.4 0.69 6.8 1.31 9.2 0.63 8.1 1.34 9.1 0.60 9.4 1.03
Bhubaneswar 7.4 0.47 6.1 0.95 9.1 0.63 8.1 0.91 10.2 0.88 9.9 0.96
Chennai 8.8 0.46 8.0 0.87 10.3 0.48 10.0 0.53 10.9 0.38 10.8 0.53
Delhi 7.7 0.20 6.9 0.29 8.4 0.23 7.8 0.28 8.3 0.27 8.1 0.31
Guwahati 5.9 0.54 5.6 0.32 6.3 0.52 5.9 0.38 6.6 0.54 6.4 0.58
Hyderabad 9.4 0.32 8.4 0.46 10.8 0.28 10.1 0.43 12.4 0.29 12.9 0.99
Jaipur 7.8 0.52 7.0 0.70 8.3 0.50 7.9 0.62 6.7 0.52 6.5 0.70
Kolkata 10.3 0.33 9.8 0.54 10.9 0.33 10.4 0.28 10.9 0.37 10.7 0.39
Lucknow 8.2 0.46 7.7 0.48 9.1 0.54 8.9 0.51 9.2 0.67 9.5 0.66
Mumbai 8.5 0.21 8.0 0.20 8.7 0.24 8.2 0.22 7.6 0.35 7.9 0.38
Nagpur 6.8 0.24 6.1 0.37 8.4 0.31 7.8 0.36 8.6 0.37 8.2 0.54
Patna 7.7 0.34 7.5 0.54 7.9 0.32 7.6 0.47 7.0 0.46 7.5 0.32
Thiruvananthapuram 6.8 0.63 5.7 0.29 8.3 0.67 7.4 0.56 9.6 0.82 9.4 0.80
Chandigarh 8.3 0.59 9.0 0.48 8.8 0.85 9.0 0.63 7.7 1.23 8.3 1.35
Ranchi 7.7 0.42 7.7 0.38 8.0 0.55 7.9 0.42 7.9 0.73 8.3 0.64
Raipur 7.8 0.59 7.4 0.51 8.7 0.72 8.2 0.57 7.8 0.62 7.8 0.61
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-19 8.0 0.09 6.9 0.14 8.7 0.10 7.8 0.12 8.3 0.12 8.1 0.17
Sep-19 8.2 0.12 7.1 0.18 8.9 0.12 8.0 0.15 8.6 0.13 8.1 0.19
Nov-19 9.1 0.10 8.2 0.17 9.8 0.11 9.2 0.23 9.7 0.12 9.9 0.19
Jan-20 8.7 0.11 7.6 0.19 9.5 0.11 8.6 0.16 9.3 0.13 9.2 0.25
Mar-20 8.4 0.09 7.6 0.12 9.2 0.10 8.5 0.11 9.1 0.11 9.0 0.18
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-19 62.6 62.3 54.9 58.8 63.4
Sep-19 62.7 62.1 50.2 56.8 61.2
Nov-19 64.7 65.1 51.0 60.7 63.1
Jan-20 66.1 66.2 53.4 59.3 64.5
Mar-20 65.4 64.6 55.8 61.1 64.7
One Year Ahead
Mar-19 70.2 68.8 61.8 66.0 69.9
Sep-19 70.7 67.5 56.8 65.5 70.0
Nov-19 73.9 70.9 57.8 69.7 72.3
Jan-20 72.2 70.9 60.3 67.8 72.8
Mar-20 71.9 71.8 63.2 69.9 72.3
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: March 2020
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 15 3 7 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 26
1-<2 1 37 14 2 1 0 0 1 0 0 0 0 0 0 0 1 0 0 57
2-<3 1 6 81 68 38 3 2 0 2 0 0 0 0 0 0 1 0 0 202
3-<4 2 3 12 112 69 40 18 3 0 0 0 0 0 0 0 0 0 0 259
4-<5 1 1 5 15 176 101 54 13 7 0 2 0 1 0 0 0 0 0 376
5-<6 2 3 16 23 28 506 201 239 98 8 92 0 0 0 0 6 1 1 1224
6-<7 0 0 2 3 8 12 226 113 72 21 14 1 5 0 0 0 0 0 477
7-<8 0 0 3 4 4 3 8 263 143 63 74 4 4 2 3 0 0 1 579
8-<9 0 0 0 1 3 8 10 5 270 100 123 9 16 6 0 3 1 1 556
9-<10 0 0 1 0 1 1 2 2 3 111 76 18 10 4 3 1 1 1 235
10-<11 0 0 4 7 2 36 5 6 11 14 407 47 156 42 12 152 49 3 953
11-<12 0 1 0 0 0 0 0 0 0 0 1 19 10 7 2 3 1 0 44
12-<13 0 0 0 0 0 0 1 1 0 1 1 1 32 9 14 13 7 1 81
13-<14 0 0 0 0 0 0 1 0 0 0 0 0 0 8 2 4 3 0 18
14-<15 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 2 3 0 14
15-<16 0 0 0 0 0 3 0 1 1 0 8 0 1 0 1 74 79 3 171
>=16 0 0 0 0 2 2 0 0 0 0 15 0 0 0 0 9 607 5 640
Total 22 54 145 235 333 715 528 647 607 318 813 99 235 78 46 269 752 16 5912
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: March 2020
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 15 1 6 3 0 1 0 0 0 0 0 0 0 0 0 0 0 0 26
1-<2 10 21 19 2 1 2 0 0 0 0 1 0 1 0 0 0 0 0 57
2-<3 22 2 48 47 44 22 8 1 2 0 3 0 1 0 0 1 1 0 202
3-<4 23 0 1 76 47 58 32 8 8 2 1 0 1 0 0 1 1 0 259
4-<5 45 1 4 8 107 66 74 30 16 4 14 2 2 0 0 2 1 0 376
5-<6 115 1 5 9 14 318 104 225 129 35 199 5 14 5 2 28 16 0 1224
6-<7 50 0 1 2 3 8 144 71 99 27 40 4 10 7 2 3 6 0 477
7-<8 62 0 0 2 1 6 4 148 113 86 105 7 12 1 9 13 9 1 579
8-<9 86 0 0 0 0 4 2 7 119 53 174 17 45 6 9 23 11 0 556
9-<10 25 0 0 0 1 1 0 1 1 73 55 31 17 8 8 8 5 1 235
10-<11 90 0 0 1 1 13 6 1 6 4 294 32 109 39 26 195 130 6 953
11-<12 3 0 0 0 0 0 0 0 0 0 0 12 11 4 4 9 1 0 44
12-<13 5 0 0 0 0 0 0 1 1 0 3 1 19 6 9 22 14 0 81
13-<14 2 0 0 0 1 0 0 0 0 0 0 0 0 5 0 5 5 0 18
14-<15 1 0 0 0 0 0 0 0 0 0 0 0 1 0 6 1 5 0 14
15-<16 23 0 0 0 1 0 0 0 0 0 3 0 0 0 0 41 101 2 171
>=16 52 0 0 0 0 0 0 0 0 0 7 0 2 0 0 6 568 5 640
Total 629 26 84 150 221 499 374 493 494 284 899 111 245 81 75 358 874 15 5912
Note: Figures are based on sample observations

1 The survey is conducted at bi-monthly intervals by the Reserve Bank of India. 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.

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