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Date : Jun 04, 2021

Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the May 2021 round of the Inflation Expectations Survey of Households (IESH)¹. In view of the Covid-19 pandemic, the survey was conducted through telephonic interviews during April 29 to May 11, 2021 in 18 major cities. The results² are based on responses from 5,979 urban households³.

Highlights:

Households’ median inflation perception for current period rose by 150 basis points from the previous round of the survey [Charts 1a and 1b; Table 3].
Median inflation expectation for both three months and one year ahead period increased by 70 basis points each in the latest survey round [Charts 1a and 1b; Table 3].
About 60 per cent of the respondents expect higher general inflation over the next three months as well as over the next one year [Tables 1a and 1b].
Expectations on general prices and inflation were mostly aligned with those for the food group [Table 4].
Households expect higher rise in prices over one year horizon when compared to one quarter horizon for non-food products, household durables, housing and services [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

May-20

Nov-20

Jan-21

Mar-21

May-21

General

Estimate

Prices will increase

85.3

0.73

83.3

0.85

83.7

0.89

86.6

0.74

83.7

0.68

Price increase more than current rate

56.0

1.02

55.4

1.14

56.0

1.26

58.4

1.14

58.5

0.91

Price increase similar to current rate

23.5

0.89

23.6

0.95

22.4

0.95

24.1

0.94

21.2

0.76

Price increase less than current rate

5.8

0.49

4.4

0.46

5.3

0.53

4.1

0.50

4.0

0.37

No changes in prices

12.4

0.69

14.2

0.81

14.3

0.86

11.1

0.71

14.0

0.63

Decline in prices

2.3

0.32

2.4

0.32

1.9

0.30

2.3

0.29

2.3

0.30

Food Product

Prices will increase

84.6

0.75

81.5

0.83

80.9

0.95

85.2

0.70

84.4

0.72

Price increase more than current rate

58.6

1.00

54.7

1.10

54.2

1.16

61.2

1.01

60.2

0.92

Price increase similar to current rate

20.0

0.82

20.3

0.90

20.0

0.95

18.1

0.81

19.4

0.75

Price increase less than current rate

6.0

0.49

6.5

0.59

6.7

0.57

6.0

0.55

4.8

0.38

No changes in prices

10.7

0.64

11.6

0.67

13.0

0.82

9.3

0.60

11.8

0.63

Decline in prices

4.7

0.45

6.9

0.54

6.1

0.54

5.5

0.45

3.9

0.39

Non- Food Product

Prices will increase

76.7

0.88

74.8

0.99

79.3

0.98

81.0

0.78

78.6

0.79

Price increase more than current rate

49.5

0.99

48.0

1.11

51.6

1.20

57.0

1.00

53.1

0.95

Price increase similar to current rate

20.8

0.82

20.3

0.87

20.9

0.90

19.4

0.77

19.8

0.75

Price increase less than current rate

6.4

0.50

6.4

0.57

6.7

0.56

4.7

0.43

5.6

0.44

No changes in prices

17.8

0.79

20.1

0.92

16.9

0.91

12.9

0.69

17.1

0.72

Decline in prices

5.5

0.49

5.2

0.48

3.8

0.40

6.2

0.48

4.3

0.42

Household Durables

Prices will increase

55.1

1.04

60.3

1.09

64.3

1.11

68.1

0.92

58.8

0.96

Price increase more than current rate

33.6

0.96

38.2

1.11

42.5

1.15

46.0

0.98

37.7

0.94

Price increase similar to current rate

16.4

0.76

16.2

0.82

16.8

0.77

17.7

0.74

16.4

0.70

Price increase less than current rate

5.1

0.44

5.8

0.59

5.0

0.49

4.4

0.44

4.7

0.40

No changes in prices

29.7

0.94

27.4

1.00

27.2

1.05

24.6

0.84

32.2

0.90

Decline in prices

15.2

0.76

12.3

0.71

8.4

0.58

7.3

0.50

9.0

0.56

Cost of Housing

Prices will increase

48.6

1.01

60.7

1.12

66.1

1.11

68.9

0.93

54.9

0.94

Price increase more than current rate

30.2

0.93

40.4

1.14

45.1

1.20

48.4

1.03

36.5

0.92

Price increase similar to current rate

13.6

0.69

15.9

0.80

16.2

0.79

16.7

0.75

14.4

0.67

Price increase less than current rate

4.8

0.45

4.4

0.50

4.8

0.49

3.8

0.40

3.9

0.36

No changes in prices

30.3

0.93

25.9

1.01

24.6

1.02

22.2

0.86

30.5

0.89

Decline in prices

21.1

0.83

13.4

0.84

9.3

0.66

8.9

0.54

14.6

0.69

Cost of Services

Prices will increase

68.3

0.97

70.4

1.02

68.8

1.06

75.6

0.90

67.6

0.89

Price increase more than current rate

43.2

0.99

44.8

1.10

45.7

1.15

51.6

1.02

44.6

0.94

Price increase similar to current rate

19.3

0.79

20.3

0.88

18.5

0.81

19.4

0.79

18.0

0.71

Price increase less than current rate

5.9

0.46

5.3

0.50

4.6

0.50

4.5

0.44

5.0

0.40

No changes in prices

27.4

0.93

25.2

0.98

27.4

1.02

20.8

0.84

29.2

0.87

Decline in prices

4.4

0.42

4.4

0.44

3.8

0.47

3.6

0.36

3.2

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 1(b): Product-wise Expectations of Prices for One Year ahead

(Percentage of Respondents)

Survey period ended

May-20

Nov-20

Jan-21

Mar-21

May-21

General

Estimate

Prices will increase

85.6

0.73

86.5

0.77

88.0

0.80

88.7

0.61

86.9

0.65

Price increase more than current rate

57.1

1.00

59.5

1.09

62.9

1.23

63.4

1.07

62.4

0.91

Price increase similar to current rate

23.8

0.88

22.9

0.92

21.2

0.95

21.4

0.87

20.3

0.75

Price increase less than current rate

4.7

0.43

4.1

0.44

3.9

0.43

3.8

0.44

4.2

0.38

No changes in prices

11.9

0.67

10.3

0.69

9.6

0.75

8.5

0.54

10.4

0.58

Decline in prices

2.5

0.33

3.2

0.39

2.4

0.33

2.8

0.32

2.7

0.33

Food Product

Prices will increase

77.3

0.86

77.7

0.97

80.5

0.96

81.7

0.74

81.7

0.76

Price increase more than current rate

46.9

1.01

48.4

1.10

53.0

1.21

54.6

1.01

53.5

0.95

Price increase similar to current rate

24.2

0.88

24.0

0.93

22.6

0.96

22.2

0.83

22.6

0.77

Price increase less than current rate

6.3

0.51

5.4

0.48

4.9

0.49

4.9

0.46

5.6

0.43

No changes in prices

15.7

0.74

14.3

0.82

13.4

0.84

12.0

0.61

12.5

0.64

Decline in prices

6.9

0.52

8.0

0.58

6.1

0.55

6.3

0.45

5.8

0.46

Non- Food Product

Prices will increase

73.3

0.92

75.0

0.98

80.4

0.93

79.9

0.79

79.2

0.78

Price increase more than current rate

42.6

0.99

45.6

1.13

52.8

1.22

54.0

1.02

51.8

0.96

Price increase similar to current rate

23.9

0.87

23.5

0.93

22.7

0.93

21.4

0.83

21.8

0.76

Price increase less than current rate

6.8

0.51

5.9

0.55

4.9

0.45

4.6

0.44

5.7

0.44

No changes in prices

20.7

0.84

19.3

0.89

15.0

0.84

13.4

0.66

15.8

0.70

Decline in prices

6.0

0.49

5.8

0.51

4.6

0.46

6.6

0.47

5.0

0.44

Household Durables

Prices will increase

59.6

1.03

65.0

1.08

69.8

1.07

70.3

0.90

64.7

0.94

Price increase more than current rate

34.8

0.99

39.9

1.08

45.0

1.20

47.2

0.98

41.2

0.94

Price increase similar to current rate

19.1

0.79

19.7

0.88

19.9

0.81

18.8

0.74

18.6

0.72

Price increase less than current rate

5.7

0.47

5.4

0.54

4.9

0.48

4.4

0.42

4.9

0.39

No changes in prices

28.4

0.93

24.6

1.01

22.1

0.97

22.7

0.81

26.7

0.86

Decline in prices

12.1

0.67

10.3

0.68

8.1

0.63

6.9

0.48

8.6

0.55

Cost of Housing

Prices will increase

59.7

1.00

72.1

1.01

74.8

1.05

75.7

0.86

65.4

0.93

Price increase more than current rate

36.9

0.98

47.8

1.10

49.9

1.22

53.8

1.04

43.5

0.97

Price increase similar to current rate

17.3

0.77

19.8

0.87

20.2

0.91

18.3

0.79

17.5

0.71

Price increase less than current rate

5.5

0.46

4.5

0.44

4.7

0.48

3.6

0.38

4.5

0.40

No changes in prices

25.1

0.89

19.2

0.86

17.7

0.95

17.8

0.76

23.3

0.83

Decline in prices

15.2

0.73

8.7

0.65

7.5

0.61

6.5

0.48

11.2

0.62

Cost of Services

Prices will increase

74.4

0.91

77.2

0.98

78.5

0.98

81.4

0.75

76.5

0.82

Price increase more than current rate

44.6

0.98

49.0

1.11

51.1

1.21

55.2

1.02

50.0

0.94

Price increase similar to current rate

23.1

0.85

22.2

0.87

22.9

0.96

21.5

0.82

21.3

0.75

Price increase less than current rate

6.7

0.50

6.1

0.55

4.6

0.45

4.7

0.44

5.2

0.43

No changes in prices

22.1

0.87

18.6

0.91

18.2

0.94

15.2

0.67

20.1

0.77

Decline in prices

3.5

0.38

4.2

0.45

3.3

0.41

3.4

0.35

3.4

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 2: Inflation Expectations of Various Groups: May 2021

Current Perception

Three Months ahead Expectation

One Year ahead Expectation

Mean

Median

Mean

Median

Mean

Median

Estimate

Overall

10.4

0.09

10.2

0.04

11.4

0.09

10.8

0.07

10.7

0.11

10.9

0.12

Gender-wise

Male

10.6

0.10

10.3

0.05

11.5

0.10

11.0

0.19

10.8

0.12

11.0

0.28

Female

9.8

0.13

9.5

0.38

11.0

0.13

10.5

0.09

10.6

0.15

10.7

0.12

Category-wise

Financial Sector Employees

9.5

0.44

8.7

0.92

10.8

0.44

10.7

0.97

10.1

0.53

10.4

1.34

Other Employees

10.3

0.14

10.2

0.07

11.3

0.14

10.8

0.15

10.7

0.17

10.8

0.18

Self Employed

10.7

0.15

10.3

0.07

11.7

0.14

11.3

0.50

10.8

0.18

11.3

0.50

Homemakers

9.8

0.14

9.6

0.38

11.0

0.14

10.5

0.09

10.6

0.18

10.7

0.14

Retired Persons

10.9

0.32

10.5

0.14

11.7

0.34

12.2

0.94

11.2

0.42

12.6

1.49

Daily Workers

10.5

0.21

10.3

0.09

11.6

0.22

11.3

0.63

10.9

0.28

11.4

0.76

Other category

10.1

0.22

10.0

0.33

10.8

0.22

10.4

0.15

10.2

0.29

10.5

0.21

Age Group-wise

Up to 25 years

9.4

0.17

8.6

0.24

10.5

0.18

10.1

0.19

10.3

0.21

10.5

0.12

25 to 30 years

10.2

0.16

10.2

0.12

11.2

0.16

10.7

0.13

10.6

0.21

10.8

0.24

30 to 35 years

10.5

0.17

10.3

0.08

11.5

0.16

11.0

0.31

10.7

0.20

10.9

0.29

35 to 40 years

10.4

0.17

10.2

0.09

11.4

0.17

10.9

0.28

10.9

0.21

11.3

0.57

40 to 45 years

10.6

0.17

10.3

0.08

11.7

0.16

11.1

0.41

10.9

0.21

11.2

0.51

45 to 50 years

10.6

0.22

10.4

0.10

11.6

0.21

11.8

0.60

10.7

0.25

11.2

0.58

50 to 55 years

10.8

0.27

10.4

0.13

11.6

0.27

11.2

0.68

10.5

0.34

10.7

0.40

55 to 60 years

10.7

0.28

10.4

0.11

11.4

0.27

10.7

0.22

10.3

0.34

10.7

0.37

60 years and above

10.9

0.27

10.4

0.14

11.7

0.27

11.6

0.77

11.2

0.32

12.4

1.05

City-wise

Ahmedabad

10.1

0.34

10.1

0.41

11.3

0.31

11.2

0.78

11.1

0.35

11.4

0.89

Bengaluru

10.5

0.26

10.4

0.10

11.9

0.25

12.4

0.64

12.0

0.31

15.2

0.33

Bhopal

9.5

0.70

8.9

1.12

10.9

0.74

10.5

1.01

9.5

0.90

10.2

1.14

Bhubaneswar

10.0

0.74

10.1

1.00

11.2

0.75

12.5

2.26

10.3

0.82

11.1

2.04

Chennai

9.3

0.33

9.6

0.72

10.3

0.34

10.2

0.44

10.4

0.42

10.8

0.72

Delhi

10.5

0.23

10.3

0.11

11.5

0.23

11.1

0.52

10.6

0.27

10.7

0.30

Guwahati

11.6

0.63

10.8

0.80

12.4

0.66

12.7

1.23

12.4

0.77

13.9

1.69

Hyderabad

10.9

0.26

10.5

0.16

11.9

0.25

12.0

0.90

11.4

0.34

13.0

1.17

Jaipur

11.3

0.50

10.8

0.90

11.6

0.50

11.2

1.30

11.2

0.62

11.5

1.52

Kolkata

11.1

0.28

10.6

0.16

12.1

0.27

13.0

0.98

11.5

0.31

12.3

0.85

Lucknow

10.1

0.44

9.1

0.41

10.7

0.41

9.9

0.40

10.7

0.50

10.7

0.44

Mumbai

10.8

0.21

10.3

0.12

11.6

0.21

11.1

0.48

10.0

0.29

10.7

0.30

Nagpur

7.5

0.44

6.7

0.42

8.7

0.42

8.2

0.49

8.2

0.58

8.4

0.47

Patna

9.5

0.86

8.9

0.90

10.1

0.88

9.8

0.88

8.8

1.06

8.8

1.13

Thiruvananthapuram

6.1

0.80

4.8

0.64

7.6

0.79

6.3

0.55

8.7

0.99

8.1

1.30

Chandigarh

10.8

0.47

10.7

0.48

11.0

0.49

11.1

0.72

10.1

0.79

10.7

0.78

Ranchi

8.1

0.51

7.5

0.52

8.4

0.47

7.9

0.56

6.9

0.67

7.1

0.71

Raipur

9.4

0.69

8.9

0.68

10.3

0.71

9.7

0.71

9.8

0.81

9.6

0.74

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

May-20

9.6

0.09

9.3

0.28

10.6

0.09

10.4

0.06

9.7

0.12

10.2

0.07

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

May-21

10.4

0.09

10.2

0.04

11.4

0.09

10.8

0.07

10.7

0.11

10.9

0.12

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

May-20

63.3

59.8

46.5

42.6

57.3

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

May-21

68.0

65.1

51.8

50.3

60.5

One Year Ahead

May-20

62.3

59.5

50.9

50.3

62.3

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

May-21

68.3

67.1

57.7

57.1

67.2

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: May 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

173

3-<4

190

4-<5

200

5-<6

359

118

135

844

6-<7

118

314

7-<8

147

101

396

8-<9

197

118

464

9-<10

178

10-<11

497

174

256

144

1249

11-<12

12-<13

13-<14

14-<15

15-<16

120

191

331

>=16

1333

1412

Total

106

136

180

518

320

375

475

234

847

109

293

475

1713

5979

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: May 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

173

3-<4

190

4-<5

200

5-<6

124

204

119

118

844

6-<7

314

7-<8

396

8-<9

116

110

464

9-<10

178

10-<11

147

306

119

265

283

1249

11-<12

12-<13

13-<14

14-<15

15-<16

208

331

>=16

171

1188

1412

Total

790

110

304

224

293

372

226

705

107

258

503

1786

5979

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 April 07, 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).