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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:

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].
Median inflation expectations for one year ahead remained at an elevated level [Charts 1a and 1b; Table 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.
Higher expectation of increase in general prices and inflation was led by the food and services groups [Tables 1a and 1b].

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

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

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

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

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-<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

2-<3

167

3-<4

204

4-<5

127

342

5-<6

397

147

245

102

1085

6-<7

126

357

7-<8

175

105

431

8-<9

220

131

501

9-<10

102

243

10-<11

406

166

244

118

1121

11-<12

12-<13

13-<14

14-<15

15-<16

126

241

>=16

984

1055

Total

154

282

634

372

557

524

254

821

119

259

419

1265

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-<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

2-<3

167

3-<4

204

4-<5

342

5-<6

150

228

199

119

166

1085

6-<7

357

7-<8

113

431

8-<9

135

116

501

9-<10

243

10-<11

119

242

119

243

236

1121

11-<12

12-<13

13-<14

14-<15

15-<16

136

241

>=16

123

884

1055

Total

679

148

414

285

441

449

259

736

140

287

101

437

1338

5955

Note: Figures are based on sample observations

¹The 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).