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Date : Oct 28, 2013
Inflation Expectations Survey of Households: September 2013 (Round 33)

The Inflation Expectations Survey of Households for the July-September 2013 quarter (33rd round) captures the inflation expectations of 4,765 urban households across 16 cities, for the next three-month and the next one-year period. These expectations are based on their individual consumption baskets and hence these rates should not be considered as predictors of any official measure of inflation. The households’ inflation expectations provide useful directional information on near-term inflationary pressures and also supplement other economic indicators to get a better indication of future inflation.

Highlights:

  1. The three-month ahead and one-year ahead mean and median inflation expectations of households increased in September 2013 round as compared to the previous round.

  2. The proportion of respondents expecting ‘general’ price rise by ‘more than current rate’ has increased for three-month ahead as well as one-year ahead period.

  3. The proportion of respondents expecting price increase by ‘more than current rate’ in three-month ahead period has increased for all products-groups. The same trend has been seen in one-year ahead period for all products-groups, except non-food products for which proportion of respondents expecting price increase by ‘more than current rate’ has marginally decreased.

  4. There was no major variation in the inflation expectations across gender and occupation category of respondents. However, age-group wise and city-wise inflation expectations varied to some extent for three-month ahead period. For one-year ahead period inflation expectation only cities were the significant source of variation.

  5. About 77 per cent (65 per cent in the last round) and 80 per cent (73 per cent in the last round) of respondents expect double digit inflation rates for three-month ahead and one-year ahead period, respectively.

  6. On the awareness of the RBI’s action to control inflation and its impact, 33 per cent (56 per cent in the last round) of the respondents were aware of the role of RBI in controlling inflation; 23 per cent (36 per cent in the last round) felt that RBI is taking necessary action. Among these 33 per cent, 63 per cent (49 per cent in the last round) reported that RBI’s action has an impact on controlling inflation.

  7. While 68 per cent of respondents (75 per cent in last round) expected that their income/wages would increase in the next one-year period, 35 per cent of respondents expected an increase in next three-month period which is relatively high as compared with 21 per cent in the previous round.


Tables

Table 1: Respondents’ Profile (Category): Share in Total Sample

Category of Respondents

Share in Total (%)

Target Share (%)

Financial Sector Employees

9.5

10.0

Other Employees

18.0

15.0

Self-employed

19.8

20.0

Housewives

28.8

30.0

Retired Persons

8.9

10.0

Daily Workers

8.7

10.0

Others

6.3

5.0

Note: The above sample proportion is for the quarter ended September 2013 survey


Table 2: Product-wise Expectations of Prices for Three-month ahead and One-year ahead

(Percentage of respondents)

Round No./survey period

30

31

32

33

30

31

32

33

(quarter ended) →

Dec-12

Mar-13

Jun-13

Sep-13

Dec-12

Mar-13

Jun-13

Sep-13

Options: General

Three-month ahead

One-year ahead

Prices will increase

98.5

99.4

99.1

87.3

98.8

98.7

98.2

92.5

Price increase more than current rate

75.7

66.9

66.1

74.5

84.7

74.8

71.3

76.6

Price increase similar to current rate

17.9

24.2

25.6

11.3

10.1

17.0

18.7

13.0

Price increase less than current rate

4.9

8.2

7.5

1.5

4.1

6.9

8.3

2.9

No change in prices

1.4

0.5

0.8

7.8

1.1

1.2

1.7

4.6

Decline in price

0.1

0.1

0.1

4.9

0.1

0.1

0.1

2.9

Options: Food Product

Three-month ahead

One-year ahead

Prices will increase

98.4

99.2

98.2

84.3

98.8

98.8

98.0

89.0

Price increase more than current rate

74.4

70.5

67.8

72.5

82.5

78.1

72.9

74.8

Price increase similar to current rate

19.8

22.8

24.4

10.6

12.8

15.9

17.9

11.5

Price increase less than current rate

4.2

6.0

6.0

1.3

3.5

4.8

7.2

2.7

No change in prices

1.4

0.7

1.7

10.1

1.1

1.1

1.9

7.1

Decline in price

0.2

0.1

0.1

5.6

0.1

0.1

0.1

3.9

Options: Non-Food Product

Three-month ahead

One-year ahead

Prices will increase

96.7

98.5

97.9

77.5

98.1

99.0

97.8

80.9

Price increase more than current rate

63.3

58.6

59.0

66.1

78.0

71.6

68.2

67.8

Price increase similar to current rate

25.3

30.2

29.9

10.3

16.0

21.1

21.9

11.4

Price increase less than current rate

8.1

9.7

9.0

1.2

4.1

6.4

7.8

1.7

No change in prices

3.0

1.4

2.1

18.0

1.8

0.9

2.1

14.4

Decline in price

0.2

0.1

0.1

4.5

0.1

0.1

0.1

4.7

Options: Household Durables

Three-month ahead

One-year ahead

Prices will increase

90.2

93.3

89.6

73.6

96.2

95.4

95.1

80.0

Price increase more than current rate

50.7

45.0

48.0

63.2

61.7

56.3

56.0

67.9

Price increase similar to current rate

27.8

34.1

30.0

9.2

23.8

27.8

26.1

10.7

Price increase less than current rate

11.7

14.2

11.6

1.2

10.7

11.3

12.9

1.5

No change in prices

9.2

6.3

9.9

19.7

3.4

4.2

4.8

14.6

Decline in price

0.6

0.4

0.5

6.6

0.4

0.4

0.1

5.4

Options: Housing Prices

Three-month ahead

One-year ahead

Prices will increase

96.3

96.8

97.4

81.9

98.0

98.0

98.0

87.2

Price increase more than current rate

72.8

64.5

64.5

74.5

79.5

72.4

69.7

78.9

Price increase similar to current rate

17.7

22.7

25.3

6.9

12.5

19.7

21.5

7.6

Price increase less than current rate

5.7

9.6

7.6

0.5

6.0

5.9

6.7

0.8

No change in prices

3.6

3.1

2.4

11.9

1.8

1.8

1.9

7.5

Decline in price

0.1

0.1

0.2

6.2

0.2

0.1

0.1

5.3

Options: Cost of Services

Three-month ahead

One-year ahead

Prices will increase

94.4

97.6

96.0

74.9

96.8

97.4

96.1

82.8

Price increase more than current rate

68.8

63.8

62.0

63.5

73.9

68.6

67.7

68.8

Price increase similar to current rate

18.7

24.7

27.1

10.5

16.3

23.1

21.1

11.8

Price increase less than current rate

6.9

9.1

6.9

0.9

6.6

5.7

7.2

2.2

No change in prices

5.4

2.3

3.8

20.6

3.0

2.5

3.8

13.2

Decline in price

0.2

0.1

0.2

4.5

0.2

0.1

0.1

3.9


Table 3: Expecting General Price Movements in Coherence with Movements in Price Expectations of Various Product Groups: Three-month ahead and One-year ahead

(Percentage of Respondents)

Round No.

Survey Quarter ended

Food

Non-Food

Households durables

Housing

Cost of services

Three-month Ahead period

30

Dec-12

89.5

82.6

67.2

84.2

83.6

31

Mar-13

85.5

83.7

68.1

80.0

82.5

32

Jun-13

85.0

83.5

69.6

83.8

83.8

33

Sep-13

77.9

69.2

65.9

69.4

64.2

One-year Ahead period

30

Dec-12

95.4

88.2

74.0

89.7

87.2

31

Mar-13

90.7

88.3

76.9

85.3

85.6

32

Jun-13

89.9

88.7

77.4

86.8

87.7

33

Sep-13

81.6

73.2

70.9

74.8

71.8


Table 4: Household Inflation Expectations -Current, Three-month Ahead and One-year Ahead

Survey Round

Survey Quarter Ended

Inflation rate in Per cent

Current

Three-month ahead

One-year ahead

Mean

Median

Std. Dev.

Mean

Median

Std. Dev.

Mean

Median

Std. Dev.

30

Dec-12

11.0

10.4

3.4

11.9

11.9

3.4

13.3

14.4

3.4

31

Mar-13

10.7

10.3

3.7

11.3

11.3

3.6

12.5

13.0

3.6

32

Jun-13

11.0

10.5

3.9

11.7

11.4

3.7

12.4

12.7

3.8

33

Sep-13

11.8

11.0

4.3

12.8

14.5

4.0

13.5

16.0

4.0


Table 5: Factors that Explain the Total Variability

Round No.

Survey Quarter

Current

Three-month ahead

One-year ahead

30

Dec-12

City, Category, Age group,

City, Category

City, Category, Age-group

31

Mar-13

City, Category

City, Category

City, Category, Age-group

32

Jun-13

City, Category

City

City

33

Sep-13

City,  Age group

City,  Age group

City

Note: Results based on exercise using Analysis of Variance.


Table 6: Various Group-wise Inflation Expectations for September, 2013 Survey Round

 

Current

Three-month Ahead

One-year Ahead

Mean

Median

Std. Dev.

Mean

Median

Std. Dev.

Mean

Median

Std. Dev

Gender-wise

Male

12.1

11.9

4.2

13.0

14.7

3.9

13.6

16.0

4.0

Female

11.5

10.8

4.4

12.6

14.1

4.2

13.4

16.0

4.1

Category-wise

Financial Sector Employees

11.8

11.3

4.3

12.6

14.0

4.0

13.2

15.6

4.3

Other Employees

11.8

11.0

4.5

12.8

14.2

4.0

13.6

16.0

3.9

Self Employed

12.0

11.6

4.2

13.0

14.7

3.9

13.6

16.0

4.0

Housewives

11.5

10.8

4.4

12.7

14.3

4.1

13.4

16.0

4.1

Retired Persons

13.0

15.0

3.8

13.6

15.5

3.6

14.2

16.2

3.7

Daily Workers

12.0

11.0

4.3

13.1

15.1

4.0

13.6

16.1

4.0

Other category

11.4

10.7

4.5

12.3

12.5

4.1

13.3

15.6

4.0

Age-wise

Up to 25 years

11.1

10.6

4.5

12.3

12.6

4.1

13.1

15.4

4.1

25 to 30 years

11.5

10.8

4.3

12.5

13.7

4.1

13.2

15.7

4.1

30 to 35 years

11.7

11.0

4.4

12.5

13.7

4.1

13.4

16.0

4.1

35 to 40 years

11.8

11.0

4.4

13.0

15.0

4.1

13.6

16.1

4.0

40 to 45 years

12.1

11.8

4.4

13.2

15.4

3.9

13.7

16.1

4.0

45 to 50 years

12.2

11.9

4.2

13.3

15.4

3.9

14.0

16.1

3.9

50 to 55 years

12.5

12.8

4.1

13.4

14.9

3.7

14.0

16.1

3.7

55 to 60 years

12.5

12.9

3.9

13.4

15.2

3.7

13.9

16.1

3.9

60 years and above

12.9

14.7

4.0

13.6

15.5

3.7

14.2

16.2

3.7

City-wise

Mumbai

11.9

11.7

4.3

12.3

12.2

4.0

13.5

15.6

4.0

Delhi

11.3

10.7

4.4

12.2

12.8

4.2

12.9

15.8

4.4

Chennai

10.7

10.4

4.3

12.9

14.5

3.9

13.4

15.8

4.1

Kolkata

12.0

10.9

4.1

13.7

15.8

3.5

14.0

16.1

3.8

Bangalore

8.8

8.6

3.5

9.2

9.4

3.6

10.3

10.2

4.0

Hyderabad

10.9

10.5

3.7

11.6

10.8

3.5

12.2

11.6

3.5

Ahmedabad

9.6

9.4

4.5

10.3

10.2

4.3

11.0

10.4

4.2

Lucknow

14.7

16.2

3.0

15.7

16.4

2.0

16.3

16.5

1.2

Jaipur

13.0

14.9

3.8

13.5

15.2

3.4

14.6

16.1

3.2

Bhopal

11.2

10.2

4.3

13.1

14.1

3.6

13.7

15.3

3.5

Patna

13.6

15.6

3.3

13.9

15.4

3.0

15.1

16.3

2.7

Guwahati

12.8

12.9

3.7

13.0

13.2

3.5

14.6

16.3

3.7

Thiruvananthapuram

13.0

14.0

3.2

14.7

16.0

2.5

14.9

16.1

2.6

Bhubaneswar

7.0

6.7

2.7

8.1

7.9

3.1

9.0

9.0

3.4

Nagpur

15.3

16.3

2.5

15.9

16.4

1.7

16.2

16.5

1.2

Kolhapur

15.4

16.4

2.8

15.6

16.4

2.7

15.1

16.4

4.0

All 

11.8

11.0

4.3

12.8

14.5

4.0

13.5

16.0

4.0


Table 7: Cross-tabulation of Current and Three-month Ahead Inflation Expectations

(Number of respondents)

 

Three-month 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-2

1

7

17

9

1

 

 

 

 

1

 

 

 

 

 

1

1

2

40

2-3

 

1

32

17

11

11

3

1

 

1

2

 

2

 

 

 

1

9

91

3-4

 

 

1

17

9

11

7

4

 

1

1

 

 

 

 

 

1

5

57

4-5

 

 

 

12

47

27

25

20

5

13

12

1

1

 

3

 

1

8

175

5-6

 

1

 

14

13

68

35

36

17

11

20

 

6

2

2

8

9

12

254

6-7

 

1

 

5

7

6

23

30

32

15

13

4

1

1

6

3

2

5

154

7-8

 

 

 

1

7

7

8

33

42

42

21

7

4

2

2

6

10

12

204

8-9

 

 

 

 

1

2

2

3

26

39

42

15

7

5

4

1

10

5

162

9-10

 

 

 

 

 

2

 

6

8

90

83

61

41

15

48

20

39

29

442

10-11

 

 

 

 

 

2

 

2

7

21

254

50

110

28

36

94

76

129

809

11-12

 

 

 

 

 

1

 

1

2

3

15

19

21

14

19

10

17

17

139

12-13

 

 

 

 

 

 

 

 

1

1

17

1

12

20

15

18

24

9

118

13-14

 

 

 

 

 

 

 

1

 

2

3

1

 

6

14

9

10

2

48

14-15

 

 

 

 

 

 

 

1

 

7

20

2

3

6

42

33

88

9

211

15-16

 

 

 

 

 

 

 

 

 

2

20

 

3

4

7

149

155

11

351

>=16

 

 

 

 

 

 

 

1

1

44

73

10

4

4

29

42

1283

19

1510

Total

1

10

50

75

96

137

103

139

141

293

596

171

215

107

227

394

1727

283

4765

Note: The shaded cells represent the number of respondents who perceived current inflation in double digit and also expected double digit inflation in the next three-month ahead.


Table 8: Cross-tabulation of Current and One-year Ahead Inflation Expectations

(Number of respondents)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-2

1

5

13

3

3

2

2

1

1

 

2

 

 

1

1

1

1

3

40

2-3

1

1

3

23

17

11

5

6

1

5

3

1

 

3

1

 

1

9

91

3-4

2

1

 

7

10

8

4

2

2

2

7

1

1

 

 

 

3

7

57

4-5

 

1

 

2

23

48

13

17

11

14

6

3

7

3

7

8

5

7

175

5-6

1

 

1

1

3

23

63

18

17

18

42

2

5

3

6

13

18

20

254

6-7

2

1

 

 

4

4

22

35

16

18

17

4

1

3

5

10

8

4

154

7-8

3

 

 

 

 

1

6

37

38

33

26

1

6

6

6

8

19

14

204

8-9

 

1

1

 

 

 

2

6

40

29

16

8

11

4

14

12

11

7

162

9-10

1

 

 

 

4

3

2

2

8

62

88

22

12

9

35

43

109

42

442

10-11

7

15

2

 

3

4

3

3

3

9

91

151

37

17

22

80

210

152

809

11-12

 

3

 

 

1

 

 

1

1

4

1

14

35

4

8

15

35

17

139

12-13

 

1

 

 

 

 

1

 

1

0

3

 

11

27

10

18

34

12

118

13-14

1

1

1

 

 

 

 

 

 

1

2

 

1

3

9

11

13

5

48

14-15

 

1

 

1

1

 

 

 

 

2

 

 

 

2

21

75

86

22

211

15-16

 

1

 

 

 

1

 

 

 

1

4

 

 

 

5

32

269

38

351

>=16

1

2

1

1

2

4

1

5

 

2

11

1

2

 

6

12

1417

42

1510

Total

20

34

22

38

71

109

124

133

139

200

319

208

129

85

156

338

2239

401

4765

Note: The shaded cells represent the number of respondents who perceived current inflation in double digit and also expected double digit inflation in the next one-year ahead.


Table 9:-Awareness of RBI’s Action on controlling Inflation and its Impact

(Percentage of respondents)

Category

Whether RBI is taking action to control inflation

Yes

No

No Idea

Impact of RBI’s action to control inflation

Yes

No

No Idea

Total

Financial Sector Employees

27.5

13.9

2.0

43.4

13.0

43.6

Other Employees

15.2

8.9

1.3

25.3

9.2

65.5

Self-Employed

17.0

7.5

0.6

25.1

8.4

66.5

Housewives

7.9

3.6

1.2

12.6

8.1

79.3

Retired persons

22.9

9.9

1.9

34.8

10.6

54.6

Daily Workers

6.5

5.1

1.0

12.6

11.6

75.8

Other Categories

18.3

9.3

0.7

28.2

9.3

62.5

All

14.7

7.3

1.2

23.3

9.4

67.3


Table 10:  Respondent's Expectation on Change in Wage/Income level

(Percentage of respondents)

Category of Respondents

Change in income since last year

Change in income in three-month ahead period

Change in income in one-year ahead period

Increase

Same

Decrease

Increase

Same

Decrease

Increase

Same

Decrease

Financial Sector Employees

55.9

37.7

6.4

36.6

58.6

4.8

74.9

21.6

3.5

Other Employees

48.5

41.5

10.0

35.0

60.8

4.2

70.9

26.6

2.6

Total Employees

51.1

40.2

8.8

35.5

60.1

4.4

72.3

24.8

2.9

Self- Employed

39.9

40.7

19.4

34.7

53.7

11.7

63.0

30.1

6.9

Daily Workers

40.9

49.6

9.4

32.9

59.8

7.3

62.7

32.0

5.3

Total

45.5

41.8

12.6

34.8

57.8

7.4

67.5

27.8

4.7


1The previous round of the survey data was released on July 29, 2013 with the publication “Macro-economic and Monetary Developments: First Quarter Review 2013-14” on the RBI website. The survey results are those of the respondents and are not necessarily shared by the Reserve Bank of India.


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