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Date : Apr 07, 2021
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the March 2021 round of the Inflation Expectations Survey of Households (IESH)1. The survey was conducted through field interviews during February 27 to March 08, 2021 in 18 major cities. The results2 are based on responses from 5,955 urban households3.

Highlights:

  1. Households’ median inflation perception for current period as well as three months ahead expectation increased by 50 basis points (bps) and 80 bps, respectively, as compared to the January 2021 round. [Charts 1a and 1b; Table 3].

  2. Median inflation expectations for one year ahead remained at an elevated level [Charts 1a and 1b; Table 3].

  3. Inflation expectations increased for the major categories of respondents (viz., financial sector employees, other employees, self-employed, homemakers, retired persons and daily workers) for both three months and one year horizons.

  4. Higher expectation of increase in general prices and inflation was led by the food and services groups [Tables 1a and 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-20 Sep-20 Nov-20 Jan-21 Mar-21
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 83.3 0.79 81.6 0.78 83.3 0.85 83.7 0.89 86.6 0.74
Price increase more than current rate 52.5 1.10 53.9 1.02 55.4 1.14 56.0 1.26 58.4 1.14
Price increase similar to current rate 25.6 0.99 22.5 0.84 23.6 0.95 22.4 0.95 24.1 0.94
Price increase less than current rate 5.2 0.56 5.2 0.46 4.4 0.46 5.3 0.53 4.1 0.50
No changes in prices 14.9 0.76 15.9 0.74 14.2 0.81 14.3 0.86 11.1 0.71
Decline in prices 1.8 0.25 2.5 0.31 2.4 0.32 1.9 0.30 2.3 0.29
Food Product                    
Prices will increase 81.9 0.81 80.4 0.80 81.5 0.83 80.9 0.95 85.2 0.70
Price increase more than current rate 55.4 1.02 52.6 1.00 54.7 1.10 54.2 1.16 61.2 1.01
Price increase similar to current rate 20.0 0.88 21.2 0.81 20.3 0.90 20.0 0.95 18.1 0.81
Price increase less than current rate 6.5 0.56 6.6 0.51 6.5 0.59 6.7 0.57 6.0 0.55
No changes in prices 12.4 0.68 14.3 0.70 11.6 0.67 13.0 0.82 9.3 0.60
Decline in prices 5.7 0.43 5.3 0.46 6.9 0.54 6.1 0.54 5.5 0.45
Non- Food Product                    
Prices will increase 77.8 0.87 75.8 0.87 74.8 0.99 79.3 0.98 81.0 0.78
Price increase more than current rate 50.8 1.00 47.3 0.99 48.0 1.11 51.6 1.20 57.0 1.00
Price increase similar to current rate 20.8 0.89 21.9 0.82 20.3 0.87 20.9 0.90 19.4 0.77
Price increase less than current rate 6.2 0.50 6.6 0.50 6.4 0.57 6.7 0.56 4.7 0.43
No changes in prices 17.7 0.79 19.2 0.80 20.1 0.92 16.9 0.91 12.9 0.69
Decline in prices 4.5 0.42 5.0 0.45 5.2 0.48 3.8 0.40 6.2 0.48
Household Durables                    
Prices will increase 64.5 1.02 56.3 1.02 60.3 1.09 64.3 1.11 68.1 0.92
Price increase more than current rate 42.3 1.03 35.0 0.96 38.2 1.11 42.5 1.15 46.0 0.98
Price increase similar to current rate 17.2 0.80 15.8 0.74 16.2 0.82 16.8 0.77 17.7 0.74
Price increase less than current rate 5.0 0.44 5.5 0.47 5.8 0.59 5.0 0.49 4.4 0.44
No changes in prices 24.2 0.90 30.7 0.94 27.4 1.00 27.2 1.05 24.6 0.84
Decline in prices 11.2 0.63 13.1 0.69 12.3 0.71 8.4 0.58 7.3 0.50
Cost of Housing                    
Prices will increase 71.0 1.07 51.8 0.98 60.7 1.12 66.1 1.11 68.9 0.93
Price increase more than current rate 49.5 1.10 32.8 0.93 40.4 1.14 45.1 1.20 48.4 1.03
Price increase similar to current rate 17.4 0.78 14.4 0.69 15.9 0.80 16.2 0.79 16.7 0.75
Price increase less than current rate 4.2 0.39 4.6 0.43 4.4 0.50 4.8 0.49 3.8 0.40
No changes in prices 22.1 0.96 29.1 0.91 25.9 1.01 24.6 1.02 22.2 0.86
Decline in prices 6.9 0.52 19.1 0.78 13.4 0.84 9.3 0.66 8.9 0.54
Cost of Services                    
Prices will increase 70.8 0.99 70.3 0.91 70.4 1.02 68.8 1.06 75.6 0.90
Price increase more than current rate 46.2 1.02 45.5 1.01 44.8 1.10 45.7 1.15 51.6 1.02
Price increase similar to current rate 19.3 0.84 19.1 0.79 20.3 0.88 18.5 0.81 19.4 0.79
Price increase less than current rate 5.2 0.44 5.7 0.47 5.3 0.50 4.6 0.50 4.5 0.44
No changes in prices 25.9 0.94 25.8 0.88 25.2 0.98 27.4 1.02 20.8 0.84
Decline in prices 3.3 0.34 3.9 0.38 4.4 0.44 3.8 0.47 3.6 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 Mar-20 Sep-20 Nov-20 Jan-21 Mar-21
General Estimate SE Estimate SE Estimate SE SE Estimate SE Estimate
Prices will increase 89.2 0.65 84.8 0.73 86.5 0.77 88.0 0.80 88.7 0.61
Price increase more than current rate 60.7 1.07 59.6 1.00 59.5 1.09 62.9 1.23 63.4 1.07
Price increase similar to current rate 24.8 1.00 20.4 0.82 22.9 0.92 21.2 0.95 21.4 0.87
Price increase less than current rate 3.7 0.42 4.7 0.43 4.1 0.44 3.9 0.43 3.8 0.44
No changes in prices 9.0 0.62 12.1 0.67 10.3 0.69 9.6 0.75 8.5 0.54
Decline in prices 1.8 0.26 3.1 0.35 3.2 0.39 2.4 0.33 2.8 0.32
Food Product                    
Prices will increase 85.6 0.73 77.3 0.85 77.7 0.97 80.5 0.96 81.7 0.74
Price increase more than current rate 55.6 1.10 48.3 0.99 48.4 1.10 53.0 1.21 54.6 1.01
Price increase similar to current rate 24.3 0.93 22.5 0.82 24.0 0.93 22.6 0.96 22.2 0.83
Price increase less than current rate 5.7 0.49 6.4 0.51 5.4 0.48 4.9 0.49 4.9 0.46
No changes in prices 10.3 0.64 14.8 0.72 14.3 0.82 13.4 0.84 12.0 0.61
Decline in prices 4.1 0.37 7.9 0.55 8.0 0.58 6.1 0.55 6.3 0.45
Non- Food Product                    
Prices will increase 82.3 0.81 75.7 0.87 75.0 0.98 80.4 0.93 79.9 0.79
Price increase more than current rate 53.6 1.08 47.3 1.00 45.6 1.13 52.8 1.22 54.0 1.02
Price increase similar to current rate 23.4 0.92 22.2 0.83 23.5 0.93 22.7 0.93 21.4 0.83
Price increase less than current rate 5.3 0.47 6.1 0.49 5.9 0.55 4.9 0.45 4.6 0.44
No changes in prices 14.2 0.73 18.2 0.78 19.3 0.89 15.0 0.84 13.4 0.66
Decline in prices 3.4 0.36 6.1 0.49 5.8 0.51 4.6 0.46 6.6 0.47
Household Durables                    
Prices will increase 70.8 1.02 62.3 0.98 65.0 1.08 69.8 1.07 70.3 0.90
Price increase more than current rate 46.6 1.09 38.8 0.98 39.9 1.08 45.0 1.20 47.2 0.98
Price increase similar to current rate 19.8 0.86 18.4 0.77 19.7 0.88 19.9 0.81 18.8 0.74
Price increase less than current rate 4.4 0.42 5.1 0.45 5.4 0.54 4.9 0.48 4.4 0.42
No changes in prices 19.7 0.87 26.5 0.88 24.6 1.01 22.1 0.97 22.7 0.81
Decline in prices 9.5 0.59 11.2 0.64 10.3 0.68 8.1 0.63 6.9 0.48
Cost of Housing                    
Prices will increase 79.9 0.90 63.9 0.95 72.1 1.01 74.8 1.05 75.7 0.86
Price increase more than current rate 56.5 1.03 42.0 0.99 47.8 1.10 49.9 1.22 53.8 1.04
Price increase similar to current rate 19.6 0.82 17.4 0.75 19.8 0.87 20.2 0.91 18.3 0.79
Price increase less than current rate 3.8 0.39 4.6 0.43 4.5 0.44 4.7 0.48 3.6 0.38
No changes in prices 14.5 0.78 23.8 0.85 19.2 0.86 17.7 0.95 17.8 0.76
Decline in prices 5.5 0.47 12.2 0.67 8.7 0.65 7.5 0.61 6.5 0.48
Cost of Services                    
Prices will increase 81.4 0.85 76.8 0.86 77.2 0.98 78.5 0.98 81.4 0.75
Price increase more than current rate 53.0 1.09 48.5 1.01 49.0 1.11 51.1 1.21 55.2 1.02
Price increase similar to current rate 23.3 0.90 22.0 0.83 22.2 0.87 22.9 0.96 21.5 0.82
Price increase less than current rate 5.0 0.44 6.3 0.50 6.1 0.55 4.6 0.45 4.7 0.44
No changes in prices 16.0 0.81 19.6 0.81 18.6 0.91 18.2 0.94 15.2 0.67
Decline in prices 2.7 0.30 3.6 0.37 4.2 0.45 3.3 0.41 3.4 0.35
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 2021
  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 9.4 0.11 8.7 0.16 10.4 0.11 10.1 0.11 10.0 0.12 10.2 0.09
Gender-wise                        
Male 9.8 0.14 9.4 0.31 10.7 0.14 10.3 0.10 10.2 0.16 10.4 0.12
Female 9.1 0.15 8.4 0.19 10.3 0.15 9.7 0.34 10.0 0.18 10.2 0.14
Category-wise                        
Financial Sector Employees 8.5 0.43 8.3 0.52 9.3 0.42 9.4 0.71 8.7 0.48 8.8 0.77
Other Employees 9.6 0.19 8.8 0.26 10.5 0.20 10.0 0.24 10.2 0.22 10.2 0.18
Self Employed 9.4 0.20 8.9 0.35 10.4 0.20 10.2 0.14 10.0 0.24 10.3 0.21
Homemakers 9.1 0.17 8.4 0.24 10.2 0.18 9.7 0.35 9.9 0.21 10.1 0.20
Retired Persons 10.6 0.37 10.3 0.47 11.4 0.34 11.3 0.82 10.6 0.44 11.3 0.81
Daily Workers 9.8 0.31 9.4 0.55 10.6 0.31 10.3 0.29 10.2 0.32 10.4 0.29
Other category 9.1 0.24 8.3 0.35 10.1 0.25 9.2 0.43 9.6 0.29 9.2 0.51
Age Group-wise                        
Up to 25 years 8.8 0.19 8.0 0.23 10.0 0.20 9.3 0.41 9.8 0.24 9.9 0.36
25 to 30 years 9.0 0.19 8.3 0.21 10.0 0.20 9.2 0.40 9.9 0.23 9.7 0.38
30 to 35 years 9.3 0.21 8.5 0.26 10.3 0.21 9.8 0.32 10.0 0.25 10.0 0.25
35 to 40 years 9.5 0.22 8.9 0.36 10.5 0.22 10.2 0.20 10.1 0.26 10.3 0.17
40 to 45 years 9.4 0.23 8.9 0.35 10.5 0.23 10.1 0.28 9.9 0.28 10.3 0.20
45 to 50 years 10.1 0.25 9.9 0.32 11.1 0.24 10.6 0.19 10.6 0.28 10.6 0.34
50 to 55 years 10.0 0.24 10.0 0.25 11.0 0.24 10.5 0.19 9.5 0.34 10.1 0.29
55 to 60 years 10.4 0.32 10.2 0.20 11.4 0.30 11.0 0.52 10.7 0.37 11.0 0.48
60 years and above 10.6 0.30 10.3 0.20 11.5 0.28 11.3 0.80 10.9 0.37 11.6 0.91
City-wise                        
Ahmedabad 10.1 0.67 9.6 1.04 11.3 0.66 11.4 1.62 11.0 0.64 11.4 1.62
Bengaluru 9.6 0.32 9.6 0.80 10.7 0.34 10.4 0.40 10.5 0.34 10.9 0.45
Bhopal 8.6 0.87 6.8 1.28 9.6 0.85 8.4 1.19 9.5 0.73 8.9 1.19
Bhubaneswar 10.5 0.59 10.1 0.68 11.2 0.49 11.0 1.25 9.1 0.87 9.8 1.13
Chennai 10.1 0.33 10.3 0.16 11.7 0.33 11.3 0.67 11.6 0.42 13.3 1.40
Delhi 9.6 0.21 9.1 0.44 10.6 0.23 10.1 0.30 10.1 0.25 10.1 0.29
Guwahati 7.6 0.39 8.0 0.46 7.7 0.41 8.2 0.40 7.0 0.71 8.1 0.86
Hyderabad 10.7 0.30 10.5 0.12 12.2 0.30 13.2 1.11 11.9 0.33 13.5 1.06
Jaipur 8.4 0.39 8.0 0.49 8.9 0.32 8.6 0.49 8.5 0.52 8.6 0.64
Kolkata 9.0 0.26 8.4 0.33 10.1 0.25 9.7 0.40 10.2 0.29 10.1 0.28
Lucknow 9.5 0.71 9.1 0.71 10.5 0.69 10.2 0.50 10.7 0.70 10.7 0.87
Mumbai 9.4 0.35 8.2 0.42 9.9 0.35 8.9 0.48 8.3 0.35 7.8 0.54
Nagpur 8.2 0.59 7.5 0.53 9.9 0.56 9.7 0.68 10.4 0.58 10.3 0.33
Patna 8.0 0.45 7.7 0.61 8.6 0.45 8.3 0.66 8.4 0.44 8.2 0.65
Thiruvananthapuram 5.6 0.67 4.9 0.62 7.1 0.77 6.0 0.67 8.2 1.02 7.3 1.00
Chandigarh 10.6 0.46 10.4 0.18 10.4 0.73 10.2 0.58 10.1 0.98 10.3 0.71
Ranchi 6.7 0.31 6.2 0.40 7.2 0.42 6.8 0.64 7.0 0.72 7.5 0.84
Raipur 7.4 0.75 6.9 0.69 8.7 0.84 8.2 0.65 10.4 0.67 10.7 1.05
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-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
Sep-20 9.9 0.10 9.8 0.25 10.8 0.10 10.4 0.07 9.9 0.12 10.3 0.08
Nov-20 9.5 0.11 8.8 0.18 10.4 0.11 10.1 0.09 9.8 0.13 10.1 0.11
Jan-21 9.1 0.12 8.2 0.17 10.0 0.12 9.3 0.29 9.7 0.13 10.1 0.15
Mar-21 9.4 0.11 8.7 0.16 10.4 0.11 10.1 0.11 10.0 0.12 10.2 0.09
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-20 65.4 64.6 55.8 61.1 64.7
Sep-20 62.1 61.0 50.4 45.9 60.5
Nov-20 62.7 63.5 52.4 54.0 60.7
Jan-21 63.3 64.3 54.5 55.7 62.8
Mar-21 67.0 65.7 57.4 58.6 65.1
One Year Ahead
Mar-20 71.9 71.8 63.2 69.9 72.3
Sep-20 63.0 64.8 55.5 53.6 66.6
Nov-20 66.4 65.9 56.7 62.1 68.9
Jan-21 68.4 68.6 60.6 63.0 69.0
Mar-21 69.6 70.1 62.4 65.5 71.6
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: March 2021
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 6 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 8
1-<2 0 20 9 7 2 0 0 0 0 0 0 0 0 0 0 0 1 0 39
2-<3 1 7 61 46 36 11 3 2 0 0 0 0 0 0 0 0 0 0 167
3-<4 0 2 8 60 58 61 11 2 1 0 0 0 1 0 0 0 0 0 204
4-<5 0 0 12 12 127 98 72 10 6 1 3 0 1 0 0 0 0 0 342
5-<6 0 4 1 27 46 397 147 245 93 8 102 0 2 0 0 10 3 0 1085
6-<7 0 1 1 1 5 12 126 95 73 15 24 1 2 0 0 1 0 0 357
7-<8 0 0 1 1 3 10 4 175 105 47 63 5 9 3 2 3 0 0 431
8-<9 0 1 1 0 1 7 4 8 220 73 131 12 24 4 4 6 5 0 501
9-<10 0 0 1 0 2 0 0 2 1 102 57 28 26 6 4 9 5 0 243
10-<11 0 0 0 0 0 22 3 16 18 8 406 56 166 45 19 244 118 0 1121
11-<12 0 0 0 0 0 0 0 0 0 0 0 15 4 8 1 0 0 0 28
12-<13 0 0 0 0 1 0 1 0 2 0 2 1 22 14 15 19 11 0 88
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 0 7 3 8 5 0 23
14-<15 0 0 0 0 0 0 1 0 0 0 0 0 1 0 9 4 7 0 22
15-<16 0 0 0 0 1 8 0 1 4 0 4 1 0 3 4 89 126 0 241
>=16 0 0 0 0 0 7 0 1 1 0 29 0 1 2 1 26 984 3 1055
Total 7 36 95 154 282 634 372 557 524 254 821 119 259 92 62 419 1265 3 5955
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 2021
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 4 0 0 1 0 2 0 0 0 0 0 0 0 0 0 0 0 1 8
1-<2 10 10 7 5 4 3 0 0 0 0 0 0 0 0 0 0 0 0 39
2-<3 22 4 32 31 30 23 12 4 4 1 3 0 1 0 0 0 0 0 167
3-<4 21 0 2 39 23 62 18 21 9 4 4 0 1 0 0 0 0 0 204
4-<5 50 0 2 6 75 61 68 36 25 1 11 0 1 1 0 3 2 0 342
5-<6 150 1 3 11 12 228 86 199 119 37 166 10 11 3 1 31 15 2 1085
6-<7 24 0 1 0 2 9 87 49 86 24 52 4 10 2 1 4 2 0 357
7-<8 49 0 0 0 2 4 7 113 56 63 71 15 19 9 6 12 5 0 431
8-<9 52 0 0 0 0 5 2 3 135 54 116 34 53 8 9 13 17 0 501
9-<10 18 0 1 0 0 0 0 2 1 67 36 33 46 10 7 18 4 0 243
10-<11 119 0 0 1 0 14 3 13 13 8 242 29 119 53 27 243 236 1 1121
11-<12 1 0 0 0 0 0 0 0 0 0 0 13 6 6 1 1 0 0 28
12-<13 5 0 0 0 0 1 0 0 0 0 5 1 17 3 14 23 19 0 88
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 0 5 2 10 6 0 23
14-<15 3 0 0 0 0 0 0 0 0 0 0 0 0 0 5 2 12 0 22
15-<16 28 0 0 0 0 1 0 0 1 0 5 0 2 1 1 66 136 0 241
>=16 123 0 0 0 0 1 2 1 0 0 25 1 1 0 2 11 884 4 1055
Total 679 15 48 94 148 414 285 441 449 259 736 140 287 101 76 437 1338 8 5955
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 05, 2021.

2 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.

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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