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Date : Jun 08, 2023
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of May 2023 round of its bi-monthly inflation expectations survey of households (IESH)1 2. The survey was conducted during May 2-11, 2023 in 19 major cities, with responses from 6,068 urban households. Female respondents accounted for 50.4 per cent of this sample.

Highlights:

  1. Households’ median inflation perception for the current period eased by 10 basis points (bps) to 8.8 per cent in the latest survey round [Charts 1a and 1b; Table 3].

  2. Inflation expectations for both three months and one year ahead periods moderated by 10 bps each from March 2023 level to 10.1 and 10.4 per cent, respectively [Charts 1a and 1b; Table 3].

  3. Among respondent categories, inflation expectations of retired persons were the highest [Table 2].

  4. As compared to the last survey round, the share of households expecting prices to rise has come down for both the time horizons [Table 1(a) and Table 1(b)].

  5. Three months and one year ahead expectations on overall prices had highest coherence with respondents’ perception on cost of services [Table 4].

Chart 1 and Chart 2

Note: Please see the excel file for time series data.3

Table 1(a): Product-wise Expectations of Prices for Three Months ahead
(Percentage of Respondents)
Survey period ended May-22 Nov-22 Jan-23 Mar-23 May-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 88.5 0.69 83.8 0.76 84.3 0.76 83.8 0.83 81.2 0.82
Price increase more than current rate 66.1 1.10 58.5 1.13 60.8 1.14 60.6 1.17 59.7 1.08
Price increase similar to current rate 18.9 0.83 20.8 0.89 20.2 0.86 19.8 0.87 17.9 0.77
Price increase less than current rate 3.5 0.37 4.4 0.43 3.4 0.36 3.5 0.36 3.5 0.41
No changes in prices 9.1 0.62 13.7 0.69 13.3 0.71 13.3 0.74 15.7 0.77
Decline in prices 2.3 0.32 2.5 0.32 2.3 0.30 2.8 0.41 3.1 0.35
Food Product                    
Prices will increase 88.4 0.66 85.0 0.72 84.6 0.72 84.0 0.75 82.7 0.73
Price increase more than current rate 65.6 1.04 62.0 1.04 61.1 1.08 62.1 1.12 61.8 1.00
Price increase similar to current rate 17.4 0.78 17.2 0.76 18.4 0.77 16.9 0.79 16.2 0.71
Price increase less than current rate 5.4 0.44 5.9 0.48 5.1 0.43 5.1 0.42 4.7 0.42
No changes in prices 7.1 0.51 9.9 0.58 10.2 0.59 9.7 0.59 11.0 0.61
Decline in prices 4.5 0.43 5.1 0.44 5.2 0.45 6.3 0.53 6.3 0.48
Non- Food Product                    
Prices will increase 87.5 0.70 81.1 0.77 81.8 0.77 81.3 0.79 78.4 0.84
Price increase more than current rate 64.5 1.05 57.2 1.05 56.4 1.08 58.6 1.10 57.1 1.08
Price increase similar to current rate 17.9 0.79 17.9 0.78 20.5 0.82 17.7 0.80 16.6 0.70
Price increase less than current rate 5.1 0.44 6.0 0.48 4.9 0.44 5.1 0.43 4.6 0.43
No changes in prices 8.2 0.54 14.4 0.70 13.4 0.67 13.3 0.67 16.2 0.74
Decline in prices 4.2 0.43 4.5 0.43 4.7 0.43 5.4 0.51 5.4 0.45
Household Durables                    
Prices will increase 74.7 0.93 68.3 0.93 72.4 0.90 67.9 0.92 68.2 0.90
Price increase more than current rate 53.4 1.13 47.2 1.07 50.3 1.07 47.8 1.09 49.5 1.06
Price increase similar to current rate 16.3 0.78 16.0 0.75 17.5 0.71 15.8 0.75 14.8 0.67
Price increase less than current rate 5.1 0.42 5.1 0.43 4.6 0.42 4.2 0.41 3.9 0.38
No changes in prices 19.7 0.82 24.5 0.87 21.2 0.84 22.4 0.85 24.6 0.86
Decline in prices 5.5 0.44 7.3 0.49 6.3 0.47 9.7 0.60 7.2 0.51
Cost of Housing                    
Prices will increase 78.5 0.90 76.5 0.88 78.0 0.86 78.2 0.92 78.1 0.82
Price increase more than current rate 59.4 1.11 55.4 1.09 58.4 1.08 57.7 1.14 59.4 1.06
Price increase similar to current rate 15.4 0.73 16.8 0.75 16.3 0.73 16.7 0.76 15.1 0.74
Price increase less than current rate 3.7 0.35 4.3 0.41 3.3 0.35 3.8 0.39 3.7 0.35
No changes in prices 17.1 0.82 19.3 0.83 18.9 0.84 18.1 0.83 18.7 0.79
Decline in prices 4.3 0.40 4.2 0.40 3.1 0.34 3.7 0.44 3.2 0.36
Cost of Services                    
Prices will increase 78.5 0.88 70.6 0.89 71.7 0.90 73.2 0.90 70.6 0.89
Price increase more than current rate 56.4 1.09 49.1 1.04 49.9 1.08 51.7 1.11 51.3 1.00
Price increase similar to current rate 17.4 0.71 16.9 0.73 17.6 0.71 17.8 0.76 15.8 0.69
Price increase less than current rate 4.8 0.42 4.5 0.41 4.1 0.40 3.6 0.37 3.5 0.37
No changes in prices 18.6 0.82 26.6 0.88 25.5 0.88 23.2 0.86 26.2 0.87
Decline in prices 2.8 0.32 2.9 0.33 2.7 0.30 3.6 0.40 3.2 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 May-22 Nov-22 Jan-23 Mar-23 May-23
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 91.3 0.60 90.8 0.57 91.6 0.53 90.4 0.66 89.6 0.61
Price increase more than current rate 70.8 1.07 69.5 1.08 70.8 1.02 69.3 1.11 70.2 1.05
Price increase similar to current rate 17.3 0.82 18.2 0.87 17.9 0.81 18.1 0.87 16.7 0.77
Price increase less than current rate 3.1 0.36 3.1 0.34 3.0 0.33 3.0 0.33 2.7 0.32
No changes in prices 5.8 0.47 6.4 0.45 5.7 0.43 6.4 0.50 7.3 0.50
Decline in prices 2.8 0.36 2.8 0.33 2.6 0.31 3.2 0.43 3.1 0.35
Food Product                    
Prices will increase 86.7 0.72 87.1 0.64 88.0 0.64 86.3 0.71 86.9 0.66
Price increase more than current rate 62.8 1.10 62.9 1.07 62.7 1.07 63.7 1.16 64.6 0.99
Price increase similar to current rate 19.2 0.82 19.6 0.83 20.7 0.87 18.5 0.86 18.3 0.77
Price increase less than current rate 4.7 0.41 4.7 0.42 4.5 0.42 4.1 0.38 4.0 0.40
No changes in prices 8.1 0.52 7.8 0.50 7.6 0.50 8.1 0.53 8.0 0.51
Decline in prices 5.2 0.48 5.0 0.41 4.4 0.39 5.6 0.52 5.2 0.44
Non- Food Product                    
Prices will increase 87.0 0.72 85.0 0.71 86.7 0.67 85.4 0.73 84.1 0.72
Price increase more than current rate 63.7 1.09 60.7 1.09 62.0 1.09 62.9 1.12 62.0 1.05
Price increase similar to current rate 19.1 0.82 19.9 0.84 20.5 0.83 18.2 0.78 17.9 0.77
Price increase less than current rate 4.3 0.40 4.5 0.41 4.3 0.41 4.3 0.40 4.2 0.41
No changes in prices 8.2 0.54 10.1 0.58 9.1 0.54 9.4 0.55 11.1 0.61
Decline in prices 4.7 0.47 4.8 0.42 4.1 0.39 5.2 0.51 4.8 0.43
Household Durables                    
Prices will increase 78.7 0.84 77.6 0.84 80.8 0.77 76.5 0.85 76.9 0.83
Price increase more than current rate 56.4 1.09 55.0 1.09 57.2 1.08 55.8 1.15 57.0 1.07
Price increase similar to current rate 17.4 0.75 18.2 0.80 19.3 0.79 16.9 0.80 16.1 0.72
Price increase less than current rate 4.9 0.42 4.3 0.39 4.3 0.41 3.8 0.38 3.7 0.37
No changes in prices 15.9 0.72 16.4 0.72 13.8 0.65 15.4 0.70 16.7 0.71
Decline in prices 5.3 0.46 6.0 0.47 5.4 0.43 8.1 0.60 6.4 0.48
Cost of Housing                    
Prices will increase 85.3 0.72 86.5 0.69 87.4 0.63 87.4 0.65 87.9 0.63
Price increase more than current rate 64.2 1.07 64.4 1.04 66.8 0.98 66.6 1.06 67.4 1.00
Price increase similar to current rate 17.2 0.77 18.5 0.80 17.2 0.77 17.4 0.80 17.1 0.76
Price increase less than current rate 4.0 0.38 3.7 0.38 3.5 0.36 3.4 0.37 3.4 0.34
No changes in prices 10.5 0.60 10.2 0.59 9.8 0.57 9.2 0.54 9.1 0.54
Decline in prices 4.1 0.40 3.3 0.37 2.8 0.30 3.4 0.41 3.0 0.34
Cost of Services                    
Prices will increase 84.9 0.78 84.2 0.74 84.0 0.72 83.6 0.80 83.2 0.72
Price increase more than current rate 62.2 1.10 60.1 1.10 60.2 1.08 60.5 1.14 61.1 1.05
Price increase similar to current rate 17.8 0.78 19.8 0.83 19.7 0.80 18.8 0.83 18.2 0.81
Price increase less than current rate 4.9 0.42 4.3 0.39 4.2 0.41 4.3 0.39 3.9 0.36
No changes in prices 12.0 0.67 12.9 0.67 13.1 0.65 13.0 0.68 13.7 0.64
Decline in prices 3.0 0.38 2.9 0.33 2.8 0.33 3.4 0.44 3.1 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 2: Inflation Expectations of Various Groups: May-23
  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 9.3 0.09 8.8 0.13 10.3 0.10 10.1 0.08 10.2 0.11 10.4 0.08
Gender-wise                        
Male 9.5 0.13 8.9 0.21 10.4 0.14 10.1 0.13 10.1 0.16 10.3 0.11
Female 9.2 0.12 8.6 0.16 10.3 0.13 10.1 0.13 10.3 0.15 10.5 0.10
Category-wise                        
Financial Sector Employees 8.6 0.43 7.7 0.55 9.1 0.42 8.2 0.45 9.5 0.42 9.8 0.46
Other Employees 9.6 0.18 8.9 0.26 10.6 0.18 10.3 0.13 10.3 0.21 10.4 0.12
Self Employed 9.4 0.19 8.9 0.35 10.3 0.20 10.1 0.22 9.9 0.24 10.3 0.17
Homemaker 9.2 0.15 8.7 0.20 10.4 0.16 10.2 0.12 10.4 0.19 10.5 0.11
Retired Persons 10.0 0.32 9.8 0.45 11.2 0.35 11.0 0.70 10.7 0.48 11.2 0.75
Daily Workers 9.2 0.26 8.7 0.45 10.2 0.26 9.9 0.40 9.7 0.32 10.0 0.38
Other category 8.8 0.20 8.0 0.24 9.8 0.22 9.3 0.40 10.1 0.24 10.0 0.29
Age Group-wise                        
Up to 25 years 8.7 0.18 7.9 0.20 9.8 0.19 9.1 0.32 10.1 0.22 10.0 0.23
25 to 30 years 9.2 0.18 8.7 0.27 10.2 0.19 10.1 0.18 10.4 0.21 10.4 0.14
30 to 35 years 9.5 0.20 9.1 0.39 10.6 0.20 10.2 0.18 10.5 0.24 10.6 0.16
35 to 40 years 9.4 0.19 8.8 0.27 10.5 0.20 10.2 0.17 10.0 0.24 10.3 0.18
40 to 45 years 9.4 0.21 9.4 0.43 10.6 0.22 10.4 0.14 10.2 0.28 10.6 0.18
45 to 50 years 9.3 0.24 9.0 0.43 10.2 0.25 10.2 0.20 9.7 0.30 10.3 0.15
50 to 55 years 9.7 0.26 9.1 0.47 10.7 0.27 10.3 0.19 9.9 0.35 10.2 0.24
55 to 60 years 10.0 0.26 10.1 0.29 10.9 0.28 10.4 0.20 10.3 0.35 10.6 0.26
60 years and above 10.2 0.26 10.1 0.27 11.1 0.28 10.7 0.38 10.3 0.38 10.7 0.46
City-wise                        
Ahmedabad 9.0 0.27 8.3 0.41 10.4 0.35 9.8 0.53 10.3 0.43 10.1 0.49
Bengaluru 8.3 0.34 7.4 0.91 9.4 0.33 8.7 0.63 9.8 0.32 9.9 0.47
Bhopal 8.5 0.88 7.6 1.62 9.6 0.99 9.2 1.24 9.1 0.90 8.9 1.25
Bhubaneswar 7.9 0.39 6.6 0.87 9.6 0.52 8.8 1.01 8.9 0.73 9.2 1.01
Chennai 10.2 0.33 10.4 0.45 11.8 0.29 12.7 1.47 12.5 0.33 15.4 0.84
Delhi 9.9 0.24 10.0 0.34 10.9 0.26 10.5 0.21 10.5 0.29 10.6 0.22
Guwahati 8.9 0.56 9.1 0.82 9.7 0.61 10.0 0.74 10.6 0.77 10.9 1.24
Hyderabad 8.8 0.34 8.5 0.60 9.7 0.33 9.5 0.53 10.0 0.45 10.5 0.37
Jaipur 8.3 0.38 7.8 0.68 8.5 0.48 7.9 0.62 7.6 0.70 7.5 0.90
Jammu 9.7 1.16 9.2 1.72 9.0 0.83 7.5 1.51 7.9 0.63 7.1 1.16
Kolkata 11.0 0.30 10.4 0.21 11.9 0.30 11.8 0.95 11.7 0.31 12.2 1.00
Lucknow 9.8 0.55 9.6 0.84 10.1 0.53 9.9 0.75 9.9 0.50 9.8 0.82
Mumbai 8.8 0.18 8.3 0.14 10.1 0.19 9.9 0.32 9.5 0.26 10.1 0.27
Nagpur 9.1 0.40 8.2 0.56 10.4 0.53 9.8 0.62 10.6 0.66 10.5 0.39
Patna 8.0 0.33 7.7 0.56 8.4 0.36 8.3 0.47 7.7 0.42 7.9 0.43
Thiruvananthapuram 6.7 0.64 5.5 0.23 8.4 0.59 7.5 0.60 9.6 0.61 9.6 1.02
Chandigarh 10.7 0.73 10.6 1.62 10.5 0.73 10.6 1.32 10.2 0.78 10.7 1.37
Ranchi 9.0 0.30 8.5 0.30 9.1 0.28 8.8 0.30 9.2 0.52 9.3 0.44
Raipur 9.8 0.49 9.2 0.98 10.1 0.45 9.6 0.74 10.1 0.74 10.5 0.62
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
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
Nov-22 10.0 0.10 9.8 0.23 10.9 0.10 10.4 0.07 10.8 0.11 10.8 0.08
Jan-23 9.7 0.09 9.6 0.30 10.8 0.10 10.5 0.08 10.8 0.11 10.8 0.09
Mar-23 9.5 0.10 8.9 0.17 10.5 0.10 10.2 0.08 10.4 0.11 10.5 0.07
May-23 9.3 0.09 8.8 0.13 10.3 0.10 10.1 0.08 10.2 0.11 10.4 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 Households durables Housing Cost of services
Three Months Ahead
May-22 70.8 71.3 64.0 66.6 69.3
Nov-22 66.6 67.1 60.2 64.7 66.0
Jan-23 65.6 67.3 62.6 66.2 66.5
Mar-23 67.4 68.8 60.9 65.9 68.0
May-23 67.4 68.6 63.4 67.1 69.1
One Year Ahead
May-22 75.6 76.6 69.8 73.4 76.2
Nov-22 74.4 74.8 68.6 73.7 75.0
Jan-23 75.2 74.8 68.4 74.7 74.0
Mar-23 75.7 75.7 69.6 74.9 75.7
May-23 75.6 75.3 70.7 76.1 76.4
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-23
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 8 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10
1-<2 2 15 10 4 1 2 0 0 0 0 0 0 0 0 0 0 0 0 34
2-<3 1 11 60 61 39 8 2 4 0 0 0 0 0 0 1 0 0 0 187
3-<4 0 3 8 83 52 62 15 0 0 0 0 0 0 0 0 0 0 0 223
4-<5 0 1 11 8 93 56 44 11 11 0 1 0 1 0 0 0 0 0 237
5-<6 0 2 12 30 26 361 154 212 81 10 133 1 1 0 0 3 2 1 1029
6-<7 0 1 1 6 7 11 177 87 79 25 20 1 6 0 0 1 0 0 422
7-<8 0 0 0 2 2 9 14 174 156 60 64 3 7 0 1 0 3 0 495
8-<9 0 0 3 2 1 7 10 7 201 105 153 19 28 1 2 4 6 0 549
9-<10 0 0 0 0 1 5 0 4 4 76 64 38 29 4 1 6 3 0 235
10-<11 0 1 4 8 1 35 5 15 19 10 440 78 216 58 11 246 107 1 1255
11-<12 0 0 0 0 0 0 0 0 0 0 3 14 7 2 2 2 4 0 34
12-<13 0 0 0 0 0 0 0 0 1 0 1 1 47 14 11 35 10 1 121
13-<14 0 0 0 0 0 0 0 0 0 0 1 0 0 7 4 7 5 0 24
14-<15 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7 5 10 0 22
15-<16 0 0 0 0 2 3 2 0 2 1 9 0 3 1 2 104 178 0 307
>=16 0 1 1 1 0 4 2 0 1 0 21 0 0 0 0 21 825 7 884
Total 11 35 112 205 225 563 425 514 555 287 910 155 345 87 42 434 1153 10 6068
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-23
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 9 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 10
1-<2 8 7 9 8 0 1 0 0 0 0 0 0 0 0 0 0 0 1 34
2-<3 22 2 25 38 54 20 11 7 4 0 1 0 0 1 1 0 1 0 187
3-<4 27 0 1 42 29 58 32 8 13 7 6 0 0 0 0 0 0 0 223
4-<5 23 0 1 2 46 56 45 19 20 5 13 0 3 0 0 1 0 3 237
5-<6 133 1 4 4 12 182 107 189 110 21 192 5 14 4 2 36 13 0 1029
6-<7 55 0 0 1 1 3 85 69 105 26 49 4 16 0 0 7 1 0 422
7-<8 48 0 1 1 0 1 1 98 124 76 103 12 14 1 5 10 0 0 495
8-<9 50 0 0 0 1 4 3 2 109 84 177 35 45 5 6 15 13 0 549
9-<10 20 0 0 0 0 0 1 1 2 42 49 36 42 8 11 15 7 1 235
10-<11 122 0 0 1 0 9 3 5 13 8 246 56 170 75 24 301 220 2 1255
11-<12 2 0 0 0 0 0 0 1 0 0 0 10 7 3 1 5 5 0 34
12-<13 10 0 0 0 0 0 0 1 0 0 0 2 22 8 23 39 16 0 121
13-<14 1 0 0 0 0 0 0 0 0 0 0 0 0 4 3 11 5 0 24
14-<15 3 0 0 0 0 0 0 0 0 0 0 0 0 0 1 5 13 0 22
15-<16 26 0 0 0 0 2 0 0 0 0 7 0 1 0 0 65 206 0 307
>=16 79 0 0 0 0 2 1 1 1 0 10 0 2 0 0 13 769 6 884
Total 638 10 41 97 144 338 289 401 501 269 853 160 336 109 77 523 1269 13 6068

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 06, 2023.

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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