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Date : Aug 08, 2024

Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of July 2024 round of its bi-monthly inflation expectations survey of households (IESH)¹ ². The survey was conducted during July 2-11, 2024 in 19 major cities, with responses from 6,091 urban households. Female respondents accounted for 51.9 per cent of this sample.

Highlights:

Households’ median perception of current inflation rose by 20 basis points (bps) to 8.2 per cent in the latest survey round; their inflation expectations for the three months and one year ahead periods also increased by 20 bps each [Charts 1a and 1b; Table 3].
A larger share of households expects higher general prices and inflation as compared to the May 2024 survey round [Tables 1(a) and 1(b)].
Marginally higher price and inflationary pressures were reported across major product groups [Tables 1(a) and 1(b)].
For one year ahead period, inflation expectations were closely aligned to food prices, housing and cost of services [Table 4].

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	Jul-23		Jan-24		Mar-24		May-24		Jul-24
General	Estimate	SE	Estimate	SE	Estimate	SE	Estimate	SE	Estimate	SE
Prices will increase	80.8	0.86	78.2	0.84	76.5	0.85	80.6	0.81	82.3	0.77
Price increase more than current rate	55.3	1.20	54.4	1.09	53.1	1.08	59.1	1.13	60.5	1.13
Price increase similar to current rate	21.8	0.93	19.5	0.80	18.2	0.79	17.5	0.83	17.3	0.86
Price increase less than current rate	3.6	0.39	4.2	0.43	5.2	0.44	4.0	0.43	4.5	0.48
No changes in prices	16.1	0.79	18.3	0.79	19.6	0.80	16.6	0.77	14.6	0.71
Decline in prices	3.1	0.41	3.6	0.37	3.9	0.38	2.8	0.32	3.1	0.37
Food Product
Prices will increase	84.0	0.77	80.2	0.77	76.7	0.81	81.8	0.74	84.2	0.70
Price increase more than current rate	63.5	1.04	59.3	1.00	54.4	1.00	61.0	1.07	62.1	1.03
Price increase similar to current rate	15.5	0.72	15.6	0.72	15.7	0.69	15.3	0.74	16.0	0.75
Price increase less than current rate	5.0	0.44	5.4	0.45	6.6	0.50	5.5	0.46	6.1	0.52
No changes in prices	9.0	0.60	12.3	0.65	15.1	0.68	12.1	0.64	10.2	0.57
Decline in prices	7.0	0.54	7.5	0.51	8.2	0.54	6.1	0.46	5.6	0.47
Non- Food Product
Prices will increase	75.5	0.92	74.0	0.85	71.5	0.87	75.0	0.85	77.0	0.81
Price increase more than current rate	52.2	1.16	52.3	1.03	48.9	1.01	53.7	1.11	54.5	1.10
Price increase similar to current rate	18.4	0.80	16.4	0.71	16.2	0.71	15.6	0.72	16.2	0.79
Price increase less than current rate	4.9	0.43	5.2	0.45	6.4	0.48	5.7	0.50	6.2	0.52
No changes in prices	18.3	0.80	18.6	0.76	20.9	0.80	19.3	0.78	17.6	0.74
Decline in prices	6.2	0.54	7.4	0.52	7.7	0.51	5.7	0.43	5.4	0.48
Household Durables
Prices will increase	65.8	0.97	65.5	0.93	64.7	0.92	68.2	0.94	68.2	0.97
Price increase more than current rate	45.3	1.12	46.3	1.04	43.8	1.01	48.3	1.10	49.6	1.09
Price increase similar to current rate	15.8	0.75	14.5	0.65	15.5	0.70	15.2	0.74	13.9	0.73
Price increase less than current rate	4.6	0.41	4.7	0.42	5.4	0.44	4.7	0.44	4.7	0.44
No changes in prices	25.0	0.88	25.2	0.85	26.1	0.85	23.4	0.86	23.4	0.88
Decline in prices	9.2	0.60	9.4	0.57	9.2	0.57	8.5	0.53	8.4	0.58
Cost of Housing
Prices will increase	76.8	0.94	78.4	0.83	76.9	0.83	80.4	0.81	78.6	0.84
Price increase more than current rate	56.0	1.14	58.2	1.05	55.8	1.07	59.3	1.06	59.6	1.07
Price increase similar to current rate	17.0	0.75	16.1	0.72	16.4	0.74	16.7	0.77	14.8	0.78
Price increase less than current rate	3.7	0.35	4.0	0.41	4.7	0.40	4.3	0.44	4.1	0.45
No changes in prices	20.2	0.88	18.1	0.79	19.6	0.78	16.7	0.77	18.2	0.78
Decline in prices	3.0	0.37	3.6	0.34	3.5	0.36	3.0	0.34	3.2	0.37
Cost of Services
Prices will increase	67.7	0.97	65.0	0.93	65.0	0.97	68.6	0.98	71.0	0.95
Price increase more than current rate	47.3	1.13	46.1	1.02	45.5	1.09	49.2	1.12	52.7	1.12
Price increase similar to current rate	15.9	0.72	15.0	0.69	14.4	0.70	14.4	0.68	13.6	0.70
Price increase less than current rate	4.5	0.40	3.8	0.37	5.2	0.45	5.0	0.46	4.6	0.46
No changes in prices	28.2	0.90	30.5	0.91	30.1	0.92	27.3	0.94	25.3	0.90
Decline in prices	4.1	0.43	4.5	0.41	4.8	0.43	4.1	0.39	3.7	0.38
Note:
1. The table provides estimates and standard errors (SE) 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-23		Jan-24		Mar-24		May-24		Jul-24
General	Estimate	SE	Estimate	SE	Estimate	SE	Estimate	SE	Estimate	SE
Prices will increase	88.6	0.68	88.7	0.63	87.4	0.67	89.1	0.64	90.6	0.60
Price increase more than current rate	65.0	1.07	66.3	1.06	64.7	1.08	67.9	1.14	68.6	1.12
Price increase similar to current rate	20.5	0.86	19.1	0.83	18.5	0.83	17.8	0.90	18.3	0.86
Price increase less than current rate	3.1	0.33	3.3	0.36	4.2	0.41	3.5	0.41	3.7	0.43
No changes in prices	8.6	0.57	8.2	0.55	9.7	0.59	7.9	0.56	6.6	0.50
Decline in prices	2.8	0.35	3.0	0.36	2.9	0.35	3.0	0.34	2.9	0.35
Food Product
Prices will increase	84.7	0.75	86.4	0.68	84.5	0.73	86.0	0.68	87.1	0.65
Price increase more than current rate	60.6	1.11	63.6	1.03	59.5	1.10	62.8	1.10	63.5	1.09
Price increase similar to current rate	20.1	0.85	18.2	0.77	19.8	0.80	18.3	0.86	19.0	0.84
Price increase less than current rate	4.0	0.38	4.7	0.43	5.2	0.45	4.9	0.49	4.6	0.48
No changes in prices	9.3	0.59	8.7	0.53	10.1	0.61	9.3	0.58	7.9	0.52
Decline in prices	6.0	0.48	4.9	0.43	5.4	0.44	4.7	0.39	5.0	0.43
Non- Food Product
Prices will increase	81.6	0.85	82.0	0.80	81.1	0.76	82.1	0.79	82.9	0.77
Price increase more than current rate	57.1	1.16	59.1	1.11	56.3	1.09	59.8	1.13	61.2	1.12
Price increase similar to current rate	20.6	0.83	18.6	0.79	19.5	0.82	17.3	0.80	16.9	0.80
Price increase less than current rate	3.9	0.38	4.4	0.41	5.3	0.47	5.1	0.47	4.8	0.46
No changes in prices	13.5	0.72	13.1	0.66	14.1	0.69	12.9	0.68	12.4	0.64
Decline in prices	4.8	0.48	4.8	0.45	4.8	0.44	5.0	0.44	4.7	0.44
Household Durables
Prices will increase	75.8	0.88	74.8	0.84	74.5	0.83	76.8	0.83	77.4	0.83
Price increase more than current rate	53.2	1.10	54.0	1.06	52.3	1.06	56.0	1.12	56.6	1.12
Price increase similar to current rate	18.4	0.80	16.7	0.69	17.3	0.76	16.4	0.79	16.1	0.76
Price increase less than current rate	4.2	0.38	4.1	0.41	5.0	0.45	4.4	0.44	4.8	0.49
No changes in prices	17.7	0.76	18.3	0.75	18.1	0.76	16.6	0.72	16.3	0.73
Decline in prices	6.5	0.48	6.9	0.49	7.4	0.51	6.6	0.47	6.3	0.48
Cost of Housing
Prices will increase	86.8	0.69	88.0	0.65	87.2	0.66	89.2	0.64	88.2	0.66
Price increase more than current rate	64.6	1.05	67.7	0.96	65.6	1.01	68.7	1.02	66.6	1.05
Price increase similar to current rate	18.5	0.79	16.7	0.74	17.2	0.74	16.3	0.75	17.7	0.80
Price increase less than current rate	3.8	0.37	3.6	0.40	4.4	0.39	4.2	0.45	3.9	0.43
No changes in prices	10.4	0.60	9.1	0.55	9.5	0.57	8.4	0.57	8.6	0.55
Decline in prices	2.7	0.34	2.9	0.34	3.3	0.36	2.4	0.31	3.2	0.36
Cost of Services
Prices will increase	80.9	0.80	79.5	0.78	80.1	0.78	82.1	0.77	83.4	0.76
Price increase more than current rate	57.3	1.12	58.8	1.03	56.3	1.08	58.9	1.13	61.6	1.17
Price increase similar to current rate	19.6	0.83	16.6	0.72	18.9	0.78	18.6	0.83	17.4	0.82
Price increase less than current rate	4.0	0.39	4.1	0.40	4.9	0.45	4.6	0.44	4.4	0.45
No changes in prices	15.5	0.72	17.0	0.72	16.0	0.71	14.7	0.71	13.2	0.67
Decline in prices	3.5	0.37	3.5	0.37	3.9	0.38	3.2	0.34	3.4	0.39
Note:
1. The table provides estimates and standard errors (SE) 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-24
	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	8.9	0.09	8.2	0.12	9.8	0.10	9.4	0.24	9.8	0.11	10.1	0.09
Gender-wise
Male	9.1	0.13	8.5	0.18	10.0	0.13	9.7	0.33	10.0	0.15	10.2	0.14
Female	8.8	0.12	8.2	0.17	9.8	0.13	9.4	0.30	9.8	0.16	10.1	0.12
Category-wise
Financial Sector Employees	9.5	0.53	8.5	0.82	10.4	0.57	9.9	0.73	10.6	0.64	10.5	0.57
Other Employees	8.9	0.19	8.1	0.25	9.8	0.20	9.4	0.40	9.7	0.23	10.0	0.26
Self Employed	9.2	0.19	8.8	0.33	10.2	0.20	10.1	0.25	10.3	0.23	10.5	0.15
Homemaker	8.9	0.15	8.2	0.20	9.9	0.16	9.5	0.35	9.9	0.19	10.2	0.13
Retired Persons	9.9	0.36	9.1	0.68	10.8	0.33	10.4	0.35	10.6	0.42	10.6	0.78
Daily Workers	9.1	0.24	8.9	0.52	10.0	0.27	9.7	0.45	9.6	0.32	9.8	0.46
Other category	8.0	0.20	6.9	0.22	8.9	0.23	8.0	0.24	9.0	0.27	8.5	0.32
Age Group-wise
Up to 25 years	7.9	0.16	7.2	0.19	9.0	0.17	8.4	0.19	9.2	0.20	9.2	0.32
25 to 30 years	8.6	0.19	7.9	0.21	9.6	0.20	9.0	0.36	9.7	0.23	9.9	0.28
30 to 35 years	8.9	0.19	8.4	0.24	10.0	0.21	9.7	0.33	10.1	0.24	10.2	0.19
35 to 40 years	8.9	0.19	8.2	0.28	9.7	0.20	9.1	0.38	9.6	0.24	9.8	0.40
40 to 45 years	9.0	0.21	8.8	0.48	10.0	0.24	10.0	0.34	9.9	0.29	10.3	0.23
45 to 50 years	9.3	0.23	8.8	0.34	10.2	0.25	10.1	0.26	10.0	0.29	10.3	0.18
50 to 55 years	9.3	0.27	9.0	0.64	10.3	0.28	10.1	0.38	9.9	0.34	10.4	0.25
55 to 60 years	9.8	0.34	9.6	0.54	10.6	0.34	10.4	0.26	10.4	0.41	10.6	0.31
60 years and above	9.6	0.27	9.3	0.63	10.6	0.28	10.2	0.30	10.3	0.34	10.4	0.27
City-wise
Ahmedabad	7.5	0.31	6.7	0.36	8.5	0.37	7.6	0.32	8.3	0.47	8.1	0.54
Bengaluru	7.2	0.19	6.0	0.20	8.8	0.21	7.9	0.26	9.3	0.25	8.9	0.50
Bhopal	9.0	0.43	8.6	1.09	9.8	0.47	9.6	0.82	8.9	0.54	9.0	0.86
Bhubaneswar	9.2	0.71	8.6	1.53	10.7	0.91	10.5	1.70	10.3	1.02	11.0	1.85
Chennai	9.3	0.37	9.8	0.44	10.3	0.50	10.8	0.66	10.9	0.61	12.0	0.99
Delhi	9.2	0.22	8.6	0.40	10.0	0.24	9.8	0.52	10.0	0.28	10.0	0.42
Guwahati	9.3	0.55	10.0	0.77	9.7	0.65	10.0	0.68	9.8	0.60	10.1	0.84
Hyderabad	7.8	0.28	6.9	0.31	8.8	0.31	8.0	0.29	9.0	0.34	9.1	0.43
Jaipur	7.4	0.47	7.2	0.57	8.2	0.52	7.6	0.69	7.9	0.68	7.7	0.85
Jammu	11.1	0.85	10.1	1.12	9.2	0.82	9.0	1.17	9.4	0.58	9.6	0.88
Kolkata	10.8	0.38	10.4	0.22	11.7	0.37	11.6	0.82	11.5	0.38	12.0	1.04
Lucknow	9.2	0.47	8.3	0.83	9.9	0.47	9.3	0.73	9.7	0.47	9.4	0.71
Mumbai	9.5	0.23	8.6	0.22	10.4	0.21	10.1	0.22	10.0	0.28	10.5	0.16
Nagpur	8.5	0.43	8.0	0.56	9.9	0.51	9.5	0.54	9.8	0.75	10.3	0.52
Patna	7.8	0.52	7.5	0.71	8.6	0.74	8.4	0.74	8.2	0.80	8.4	0.98
Thiruvananthapuram	7.4	0.52	6.9	0.94	8.4	0.65	7.3	1.08	10.3	0.52	10.1	0.64
Chandigarh	10.9	0.60	9.7	0.53	11.7	0.59	10.8	0.85	11.4	0.76	11.0	0.87
Ranchi	8.9	0.38	8.4	0.36	9.3	0.45	8.9	0.52	9.1	0.74	9.4	0.84
Raipur	10.3	0.49	9.8	0.52	11.1	0.60	10.5	0.90	11.2	0.57	10.9	0.78
Note: The table provides estimates and standard errors (SE) 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-23	9.3	0.09	8.9	0.14	10.2	0.09	10.0	0.15	10.0	0.11	10.3	0.07
Jan-24	8.8	0.09	8.1	0.12	9.7	0.09	9.2	0.17	9.6	0.10	10.0	0.13
Mar-24	8.7	0.09	8.1	0.13	9.6	0.09	9.0	0.16	9.5	0.10	9.8	0.19
May-24	8.7	0.10	8.0	0.13	9.8	0.10	9.2	0.19	9.6	0.12	9.9	0.19
Jul-24	8.9	0.09	8.2	0.12	9.8	0.10	9.4	0.24	9.8	0.11	10.1	0.09
Note: The table provides estimates and standard errors (SE) 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
Jul-23	63.1	65.5	60.9	64.5	65.7
Jan-24	65.2	65.4	60.8	64.2	65.8
Mar-24	65.4	66.1	61.2	64.6	66.8
May-24	67.4	67.2	63.2	67.2	68.0
Jul-24	66.3	66.2	61.7	66.3	68.4
One Year Ahead
Jul-23	73.4	73.0	66.9	73.4	73.6
Jan-24	76.5	74.1	67.9	74.9	74.6
Mar-24	74.6	73.6	68.3	75.0	74.2
May-24	76.1	74.5	69.5	76.8	75.0
Jul-24	76.3	74.6	69.6	77.1	76.2

Table 5(a): Cross-tabulation of Number of Respondents by Current Inflation Perception and Three Months Ahead Inflation Expectations: Jul-24
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	4	2	1	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	7
	1-<2	2	25	17	7	1	1	0	0	0	0	0	0	0	0	0	0	0	0	53
	2-<3	0	9	95	66	27	6	2	2	0	0	1	0	0	0	0	0	1	1	210
	3-<4	0	2	13	90	62	62	14	2	0	1	1	0	0	0	0	0	0	0	247
	4-<5	0	0	9	10	146	75	66	7	6	2	1	0	0	0	0	0	2	0	324
	5-<6	0	2	12	33	40	442	194	161	80	13	87	2	1	0	0	3	2	0	1072
	6-<7	0	0	1	3	6	12	189	145	82	23	18	1	2	0	0	0	0	0	482
	7-<8	0	0	1	2	2	18	8	199	144	68	60	8	12	1	0	3	0	0	526
	8-<9	0	0	1	1	1	10	12	7	199	85	144	24	19	4	0	5	1	0	513
	9-<10	0	0	0	1	1	1	0	2	4	75	89	49	26	5	3	4	13	0	273
	10-<11	0	0	4	4	3	22	6	10	16	7	411	55	206	64	15	238	85	1	1147
	11-<12	0	0	0	0	0	0	0	0	0	1	0	16	14	40	3	1	2	0	77
	12-<13	0	2	1	0	0	2	0	1	0	0	3	0	32	18	16	24	10	0	109
	13-<14	0	0	0	0	0	0	0	0	1	0	1	0	0	6	38	7	1	0	54
	14-<15	0	0	1	0	0	0	0	0	0	0	0	1	0	0	4	1	6	0	13
	15-<16	0	0	0	0	0	1	0	1	0	1	4	1	3	2	2	61	125	0	201
	>=16	0	1	7	1	2	14	0	2	1	0	22	0	0	1	0	29	703	0	783
	Total	6	43	163	218	291	666	491	539	533	276	842	157	315	141	81	376	951	2	6091

Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: Jul-24
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	3	2	1	1	0	0	0	0	0	0	0	0	0	0	0	0	0	0	7
	1-<2	8	15	15	9	2	1	2	0	0	0	1	0	0	0	0	0	0	0	53
	2-<3	30	1	44	54	50	17	5	3	0	0	3	0	0	0	0	0	3	0	210
	3-<4	23	0	8	43	47	60	38	13	8	0	7	0	0	0	0	0	0	0	247
	4-<5	46	0	3	6	62	59	73	25	33	6	9	0	1	0	0	0	1	0	324
	5-<6	117	0	4	8	19	237	145	181	105	32	194	3	5	0	1	11	9	1	1072
	6-<7	52	0	0	0	3	6	90	109	107	32	58	4	18	0	1	1	1	0	482
	7-<8	53	1	0	1	1	4	4	87	108	72	130	20	26	1	6	9	3	0	526
	8-<9	46	0	0	0	0	7	3	3	106	68	157	22	58	8	5	21	9	0	513
	9-<10	10	0	0	1	0	0	0	3	3	47	67	43	43	22	8	11	15	0	273
	10-<11	98	1	0	0	1	12	0	5	10	6	220	36	161	55	27	292	218	5	1147
	11-<12	2	0	0	0	0	0	0	0	0	0	1	6	7	23	29	4	5	0	77
	12-<13	4	0	0	0	0	0	0	0	1	0	1	0	20	10	23	31	19	0	109
	13-<14	1	0	0	0	0	0	0	0	0	0	2	0	1	8	32	7	3	0	54
	14-<15	2	0	0	0	0	0	1	0	0	1	0	0	0	0	1	0	8	0	13
	15-<16	13	0	0	0	0	0	1	0	0	1	3	0	3	1	1	40	138	0	201
	>=16	68	2	5	1	1	6	1	1	1	0	18	0	1	1	1	19	655	2	783
	Total	576	22	80	124	186	409	363	430	482	265	871	134	344	129	135	446	1087	8	6091

¹ The survey is conducted at bi-monthly intervals by the Reserve Bank; it provides directional information on near-term inflationary pressures as expected by respondents and may reflect their own consumption patterns. Hence, survey results reflect respondents’ views, which are not necessarily shared by the Reserve Bank.

² All estimates of inflation expectations are given in terms of median, unless stated otherwise.

³ Results of the previous survey round were released on the Bank’s website on June 07, 2024. Unit-level data for previous rounds of the survey are available on the Bank’s ‘Database on Indian Economy’ (DBIE) portal (weblink: https://data.rbi.org.in) under the head ‘Unit-level Data’.