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Date : Aug 05, 2022
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of the July 2022 round of the Inflation Expectations Survey of Households (IESH)1 2. The survey was conducted during July 7 to 14, 2022 in 19 major cities. The results are based on responses from 5,935 urban households.

Highlights:

  1. Households’ median inflation perception for the current period moderated by 80 basis points (bps) to 9.3 per cent in the latest survey round. Their three months and one-year ahead median inflation expectations also declined by 50 bps and 60 bps, respectively, from May 2022 round of survey [Charts 1a and 1b; Table 3].

  2. Median inflation expectations moderated for most categories of respondents for current period as well as three months and one year ahead periods [Table 2].

  3. The share of households expecting higher inflation has declined for all product groups from the previous survey round [Tables 1(a) and 1(b)].

  4. Overall price expectations were generally aligned with prices of food and non-food products as well as cost of services for both three months and one year horizons [Table 4].

Chart 1a. Median Inflation Rate

Note: Please see the excel file for time series data3.

Table 1(a): Product-wise Expectations of Prices for Three Months ahead
(Percentage of Respondents)
Survey period ended Jul-21 Jan-22 Mar-22 May-22 Jul-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 85.9 0.78 85.6 0.68 89.9 0.64 88.5 0.69 83.1 0.80
Price increase more than current rate 62.8 1.14 61.4 1.07 67.2 1.27 66.1 1.10 58.7 1.21
Price increase similar to current rate 19.7 0.90 20.5 0.87 19.3 0.96 18.9 0.83 21.1 0.97
Price increase less than current rate 3.4 0.38 3.7 0.40 3.5 0.45 3.5 0.37 3.3 0.36
No changes in prices 11.2 0.70 12.0 0.64 8.6 0.59 9.1 0.62 13.7 0.74
Decline in prices 2.9 0.40 2.4 0.30 1.5 0.22 2.3 0.32 3.2 0.38
Food Product                    
Prices will increase 84.0 0.81 83.7 0.71 89.6 0.62 88.4 0.66 83.7 0.77
Price increase more than current rate 60.8 1.15 61.0 1.01 68.2 1.14 65.6 1.04 59.6 1.13
Price increase similar to current rate 17.7 0.88 17.0 0.78 16.2 0.88 17.4 0.78 18.9 0.90
Price increase less than current rate 5.4 0.53 5.7 0.47 5.2 0.48 5.4 0.44 5.2 0.45
No changes in prices 10.5 0.64 10.5 0.58 6.9 0.51 7.1 0.51 10.1 0.64
Decline in prices 5.5 0.53 5.8 0.45 3.5 0.36 4.5 0.43 6.1 0.52
Non- Food Product                    
Prices will increase 82.6 0.85 80.4 0.73 88.4 0.63 87.5 0.70 80.8 0.84
Price increase more than current rate 58.9 1.16 55.4 1.02 65.6 1.17 64.5 1.05 55.7 1.14
Price increase similar to current rate 19.0 0.91 19.4 0.80 17.6 0.87 17.9 0.79 19.8 0.89
Price increase less than current rate 4.8 0.50 5.6 0.46 5.2 0.49 5.1 0.44 5.2 0.45
No changes in prices 12.3 0.73 14.1 0.64 8.7 0.56 8.2 0.54 13.2 0.72
Decline in prices 5.1 0.50 5.4 0.43 2.9 0.31 4.2 0.43 6.0 0.49
Household Durables                    
Prices will increase 65.6 1.09 69.9 0.88 73.5 0.89 74.7 0.93 68.7 0.95
Price increase more than current rate 44.9 1.18 48.6 1.03 51.9 1.20 53.4 1.13 46.6 1.11
Price increase similar to current rate 16.8 0.86 16.2 0.70 16.0 0.83 16.3 0.78 17.3 0.81
Price increase less than current rate 4.0 0.43 5.1 0.45 5.5 0.50 5.1 0.42 4.8 0.44
No changes in prices 25.2 0.98 23.1 0.82 20.4 0.83 19.7 0.82 23.7 0.88
Decline in prices 9.2 0.66 7.0 0.45 6.1 0.44 5.5 0.44 7.6 0.54
Cost of Housing                    
Prices will increase 64.7 1.12 71.5 0.88 75.8 0.94 78.5 0.90 74.8 0.88
Price increase more than current rate 45.8 1.20 51.3 1.07 54.9 1.23 59.4 1.11 54.2 1.10
Price increase similar to current rate 14.7 0.79 16.1 0.74 16.6 0.80 15.4 0.73 16.9 0.77
Price increase less than current rate 4.2 0.46 4.2 0.42 4.3 0.40 3.7 0.35 3.7 0.37
No changes in prices 23.7 0.99 21.3 0.80 18.9 0.86 17.1 0.82 20.3 0.82
Decline in prices 11.7 0.74 7.2 0.48 5.4 0.46 4.3 0.40 4.8 0.44
Cost of Services                    
Prices will increase 74.3 1.01 74.3 0.83 76.3 0.88 78.5 0.88 71.7 0.93
Price increase more than current rate 52.3 1.19 51.6 1.05 54.5 1.19 56.4 1.09 48.6 1.12
Price increase similar to current rate 17.5 0.83 18.0 0.79 16.8 0.80 17.4 0.71 19.0 0.88
Price increase less than current rate 4.5 0.44 4.6 0.43 5.0 0.47 4.8 0.42 4.1 0.41
No changes in prices 22.0 0.94 22.3 0.78 21.2 0.86 18.6 0.82 24.8 0.92
Decline in prices 3.7 0.43 3.4 0.34 2.4 0.29 2.8 0.32 3.4 0.38
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 Jul-21 Jan-22 Mar-22 May-22 Jul-22
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 86.9 0.77 89.6 0.58 91.5 0.58 91.3 0.60 88.4 0.70
Price increase more than current rate 65.5 1.18 68.2 1.05 71.0 1.19 70.8 1.07 66.2 1.23
Price increase similar to current rate 18.5 0.93 18.1 0.81 17.4 0.93 17.3 0.82 19.3 1.00
Price increase less than current rate 2.9 0.38 3.3 0.39 3.1 0.41 3.1 0.36 2.8 0.32
No changes in prices 10.1 0.68 7.8 0.50 6.1 0.48 5.8 0.47 8.1 0.61
Decline in prices 3.1 0.41 2.6 0.29 2.4 0.29 2.8 0.36 3.4 0.41
Food Product                    
Prices will increase 80.9 0.87 83.8 0.71 85.3 0.72 86.7 0.72 83.5 0.76
Price increase more than current rate 55.7 1.18 58.2 1.06 60.9 1.19 62.8 1.10 58.1 1.18
Price increase similar to current rate 20.9 0.97 20.4 0.86 19.6 0.91 19.2 0.82 21.3 0.98
Price increase less than current rate 4.3 0.45 5.2 0.45 4.8 0.47 4.7 0.41 4.1 0.40
No changes in prices 12.5 0.72 10.9 0.61 9.8 0.59 8.1 0.52 10.5 0.65
Decline in prices 6.6 0.54 5.3 0.40 5.0 0.41 5.2 0.48 6.0 0.55
Non- Food Product                    
Prices will increase 80.4 0.91 82.9 0.72 85.8 0.73 87.0 0.72 83.6 0.78
Price increase more than current rate 56.6 1.21 57.5 1.09 62.4 1.18 63.7 1.09 58.9 1.16
Price increase similar to current rate 19.0 0.91 20.5 0.86 18.9 0.89 19.1 0.82 20.8 0.92
Price increase less than current rate 4.7 0.49 4.9 0.44 4.5 0.44 4.3 0.40 3.9 0.38
No changes in prices 13.4 0.76 12.0 0.61 9.7 0.60 8.2 0.54 10.9 0.68
Decline in prices 6.3 0.57 5.0 0.41 4.5 0.40 4.7 0.47 5.4 0.54
Household Durables                    
Prices will increase 69.2 1.05 75.4 0.87 77.3 0.84 78.7 0.84 75.5 0.84
Price increase more than current rate 46.8 1.17 52.1 1.07 54.1 1.16 56.4 1.09 52.2 1.12
Price increase similar to current rate 18.5 0.88 18.7 0.81 18.3 0.89 17.4 0.75 19.3 0.88
Price increase less than current rate 3.9 0.41 4.6 0.45 4.8 0.48 4.9 0.42 4.0 0.39
No changes in prices 22.6 0.96 18.5 0.77 17.1 0.74 15.9 0.72 18.3 0.78
Decline in prices 8.2 0.62 6.1 0.44 5.6 0.43 5.3 0.46 6.1 0.49
Cost of Housing                    
Prices will increase 71.8 1.07 79.3 0.78 83.1 0.75 85.3 0.72 83.4 0.75
Price increase more than current rate 50.8 1.21 57.0 1.03 61.1 1.17 64.2 1.07 61.4 1.14
Price increase similar to current rate 16.7 0.86 18.1 0.78 17.6 0.88 17.2 0.77 18.6 0.87
Price increase less than current rate 4.3 0.44 4.2 0.43 4.5 0.43 4.0 0.38 3.4 0.36
No changes in prices 19.8 0.92 15.1 0.66 13.2 0.67 10.5 0.60 12.4 0.67
Decline in prices 8.4 0.68 5.6 0.43 3.7 0.36 4.1 0.40 4.1 0.42
Cost of Services                    
Prices will increase 80.9 0.87 82.0 0.75 83.0 0.79 84.9 0.78 81.1 0.84
Price increase more than current rate 55.8 1.17 57.5 1.04 59.2 1.25 62.2 1.10 57.4 1.17
Price increase similar to current rate 20.6 0.91 19.8 0.81 18.8 0.93 17.8 0.78 19.9 0.95
Price increase less than current rate 4.5 0.47 4.6 0.44 5.0 0.47 4.9 0.42 3.9 0.39
No changes in prices 15.7 0.80 15.1 0.68 14.1 0.71 12.0 0.67 15.0 0.80
Decline in prices 3.4 0.41 3.0 0.31 3.0 0.32 3.0 0.38 3.8 0.45
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: Jul-22
  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 9.8 0.10 9.3 0.24 10.7 0.11 10.3 0.08 10.3 0.13 10.5 0.08
Gender-wise                        
Male 10.0 0.13 9.9 0.23 10.9 0.13 10.5 0.10 10.6 0.16 10.6 0.11
Female 9.6 0.14 9.1 0.24 10.7 0.15 10.3 0.11 10.2 0.18 10.4 0.10
Category-wise                        
Financial Sector Employees 10.0 0.48 9.9 0.43 11.1 0.47 10.7 0.50 11.3 0.53 11.6 1.05
Other Employees 9.9 0.17 9.6 0.34 10.9 0.18 10.4 0.16 10.7 0.22 10.7 0.17
Self Employed 10.2 0.19 10.1 0.18 11.1 0.20 10.6 0.14 10.6 0.25 10.7 0.19
Homemaker 9.7 0.17 9.2 0.33 10.7 0.17 10.2 0.12 10.1 0.22 10.3 0.10
Retired Persons 11.3 0.38 10.6 0.35 12.2 0.39 12.9 1.40 11.4 0.47 12.5 1.03
Daily Workers 9.6 0.28 8.8 0.48 10.6 0.28 10.1 0.33 9.7 0.38 9.9 0.46
Other category 9.2 0.23 8.5 0.24 10.3 0.23 10.0 0.23 10.2 0.27 10.3 0.17
Age Group-wise                        
Up to 25 years 8.9 0.18 8.1 0.19 10.0 0.19 9.4 0.30 9.9 0.22 10.0 0.22
25 to 30 years 9.7 0.21 9.2 0.32 10.6 0.20 10.2 0.15 10.4 0.26 10.5 0.14
30 to 35 years 9.7 0.21 8.9 0.34 10.7 0.21 10.2 0.20 10.4 0.26 10.4 0.15
35 to 40 years 9.9 0.22 9.6 0.35 10.8 0.22 10.3 0.17 10.1 0.29 10.4 0.17
40 to 45 years 10.0 0.22 9.9 0.30 11.0 0.24 10.5 0.15 10.4 0.28 10.5 0.19
45 to 50 years 10.0 0.23 10.1 0.16 11.0 0.24 10.7 0.17 10.3 0.31 10.7 0.24
50 to 55 years 10.7 0.32 10.3 0.21 11.2 0.33 10.7 0.49 10.6 0.41 10.8 0.41
55 to 60 years 10.4 0.33 10.0 0.47 11.2 0.33 10.6 0.38 10.2 0.43 10.4 0.40
60 years and above 11.2 0.30 10.6 0.14 12.1 0.28 12.8 1.15 11.7 0.32 12.8 1.06
City-wise                        
Ahmedabad 9.1 0.62 8.1 0.85 10.3 0.68 9.3 1.01 10.1 0.71 9.6 0.93
Bengaluru 10.1 0.28 10.2 0.33 11.2 0.28 10.9 0.50 11.5 0.34 12.8 1.01
Bhopal 8.4 0.79 7.0 1.48 9.5 0.81 9.1 1.29 9.2 0.84 9.0 1.56
Bhubaneswar 7.9 0.60 7.3 1.18 9.7 0.57 9.1 1.06 9.9 0.61 10.0 0.89
Chennai 10.9 0.44 10.5 0.20 12.2 0.41 12.6 1.37 12.2 0.39 13.9 1.50
Delhi 10.0 0.23 9.8 0.42 10.8 0.26 10.4 0.19 10.4 0.28 10.5 0.17
Guwahati 7.3 0.48 6.9 0.69 7.9 0.49 7.7 0.41 8.4 0.53 8.4 0.64
Hyderabad 10.5 0.47 10.1 0.40 11.0 0.49 10.8 0.61 8.9 0.67 9.9 0.73
Jaipur 10.6 0.56 10.0 0.49 11.3 0.63 10.9 0.82 10.2 0.60 10.4 0.57
Jammu 9.7 1.12 9.5 0.90 11.2 0.94 11.1 1.34 11.8 0.87 12.4 1.45
Kolkata 9.6 0.29 9.1 0.45 10.8 0.28 10.4 0.19 10.9 0.28 10.7 0.30
Lucknow 9.5 0.50 9.1 0.74 10.4 0.49 10.1 0.53 9.7 0.60 10.1 0.52
Mumbai 9.6 0.19 8.7 0.19 10.6 0.22 10.1 0.22 10.1 0.31 10.4 0.22
Nagpur 10.6 0.51 10.0 0.60 12.0 0.56 12.3 2.04 10.4 0.96 11.7 2.01
Patna 8.9 0.42 8.4 0.48 9.7 0.57 9.1 0.50 9.7 0.59 9.4 0.59
Thiruvananthapuram 6.6 0.64 5.4 0.38 8.1 0.76 6.9 0.68 9.1 0.57 8.5 0.83
Chandigarh 11.7 0.53 11.2 1.70 11.6 0.54 11.2 1.57 9.9 0.74 10.2 1.09
Ranchi 7.5 0.30 7.1 0.31 7.7 0.35 7.5 0.45 7.4 0.66 7.7 0.59
Raipur 7.0 0.40 6.4 0.59 7.4 0.54 7.1 0.67 8.0 1.13 8.7 1.47
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
Jul-21 10.5 0.11 10.3 0.06 11.7 0.11 11.3 0.42 11.0 0.13 11.5 0.48
Jan-22 9.9 0.10 9.7 0.28 11.1 0.10 10.6 0.08 10.7 0.11 10.7 0.09
Mar-22 9.8 0.12 9.7 0.31 11.1 0.12 10.7 0.09 10.9 0.13 10.8 0.11
May-22 10.3 0.11 10.1 0.08 11.4 0.11 10.8 0.11 11.1 0.12 11.1 0.27
Jul-22 9.8 0.10 9.3 0.24 10.7 0.11 10.3 0.08 10.3 0.13 10.5 0.08
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 Household durables Housing Cost of services
Three Months Ahead
Jul-21 67.5 68.9 58.4 56.8 64.9
Jan-22 66.8 65.8 60.5 61.7 66.0
Mar-22 70.5 70.8 60.2 62.0 65.8
May-22 70.8 71.3 64.0 66.6 69.3
Jul-22 66.9 67.8 62.3 63.7 66.9
One Year Ahead
Jul-21 70.0 71.0 63.3 63.4 71.4
Jan-22 71.7 72.4 65.2 67.5 72.9
Mar-22 73.1 74.2 67.5 69.4 74.4
May-22 75.6 76.6 69.8 73.4 76.2
Jul-22 74.3 75.5 69.2 73.2 75.8
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: Jul-22
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 2 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 3
1-<2 0 20 8 4 0 2 0 0 0 0 0 0 0 0 0 0 0 0 34
2-<3 0 12 53 31 30 14 0 0 0 0 0 0 1 0 0 1 0 0 142
3-<4 0 1 12 73 37 49 13 2 2 0 2 0 0 0 0 0 0 2 193
4-<5 0 0 2 12 83 55 43 15 12 3 3 0 0 0 1 0 0 1 230
5-<6 0 1 8 25 14 297 119 197 69 12 100 0 0 0 0 8 3 3 856
6-<7 0 0 4 5 3 14 133 106 83 23 23 2 2 0 1 3 0 3 405
7-<8 0 2 1 4 4 8 16 207 149 57 72 7 3 1 0 1 1 1 534
8-<9 0 0 2 4 2 7 7 10 193 102 159 18 24 5 1 1 2 1 538
9-<10 0 1 0 0 2 2 1 2 7 105 75 38 21 7 4 3 6 1 275
10-<11 0 0 0 1 2 24 4 13 23 6 420 53 165 50 19 268 110 5 1163
11-<12 0 0 0 0 0 0 1 0 0 0 3 12 6 4 8 4 3 2 43
12-<13 0 0 0 0 0 1 1 0 1 0 4 1 47 5 7 32 10 1 110
13-<14 0 0 0 0 0 2 0 1 0 1 3 0 0 3 3 3 6 0 22
14-<15 0 0 0 0 0 0 0 0 0 0 1 1 1 0 10 10 9 0 32
15-<16 0 0 0 0 0 2 0 0 0 0 10 0 4 2 1 110 155 1 285
>=16 0 0 0 0 1 12 1 0 0 2 15 0 1 2 0 18 985 33 1070
Total 2 37 90 159 179 489 339 553 539 311 890 132 275 79 55 462 1290 54 5935

Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: Jul-22
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 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 3
1-<2 7 11 7 3 2 4 0 0 0 0 0 0 0 0 0 0 0 0 34
2-<3 23 1 31 23 34 18 5 3 0 0 1 0 1 1 0 0 0 1 142
3-<4 27 0 1 37 30 42 23 11 10 3 8 0 0 0 0 0 1 0 193
4-<5 36 0 0 3 43 38 41 24 22 8 10 0 3 0 1 0 1 0 230
5-<6 109 0 0 6 11 176 73 129 100 23 163 6 12 2 0 30 14 2 856
6-<7 48 0 1 0 7 2 78 70 91 33 50 6 9 1 1 4 3 1 405
7-<8 60 0 0 0 0 6 8 122 97 80 116 7 20 3 2 11 1 1 534
8-<9 56 0 0 0 0 0 3 11 110 56 184 28 44 7 8 20 10 1 538
9-<10 27 0 0 0 0 0 0 5 3 61 63 37 36 13 5 12 11 2 275
10-<11 116 0 1 0 0 4 2 5 9 7 245 39 147 40 25 269 252 2 1163
11-<12 2 0 0 0 0 0 0 0 1 0 0 9 4 3 7 9 6 2 43
12-<13 10 0 0 0 0 0 0 0 2 0 3 0 27 8 13 20 26 1 110
13-<14 4 0 0 0 0 0 0 0 0 0 0 0 0 4 4 4 6 0 22
14-<15 0 0 0 0 0 0 0 1 0 0 0 1 2 0 5 8 15 0 32
15-<16 31 0 0 0 0 1 0 0 0 0 8 0 0 0 1 61 182 1 285
>=16 106 0 0 0 0 3 0 0 3 0 7 0 0 0 1 8 918 24 1070
Total 663 12 41 72 128 294 233 381 448 271 859 133 305 82 73 456 1446 38 5935

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 June 8, 2022.

2 The survey is conducted at bi-monthly intervals by the Reserve Bank and 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. All estimates of inflation expectations are given in the form of medians, unless stated otherwise.

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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