The Inflation Expectations Survey of Households for September 2014 (37th round) captures the inflation expectations of 4,933 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 benchmark of official measure of inflation. The households’ inflation expectations provide useful directional information on near-term inflationary pressures and also supplement other economic indicators.
Highlights:
-
The proportion of respondents expecting general price level to rise by ‘more than current rate’ has increased marginally as compared with the previous round of survey for both three-month ahead period and one-year ahead period. However, these shares are much lower when compared to the position prevailing till March 2014 round of survey. At the product level, respondents expect some moderation in the price increase in the case of household durables and services.
-
In terms of quantitative response, both three-month ahead as well as one-year ahead median inflation expectations of households remained at elevated level.
-
The survey shows that housewives and retired persons have marginally higher level of inflation expectations based on median inflation rates. Respondents from Guwahati, Lucknow and Nagpur cities expect relatively higher inflation.
-
About 72.8 per cent (72.0 per cent in the last round) and 78.7 per cent (74.0 per cent in the last round) of respondents expect double digit inflation rates for three-month ahead and one-year ahead period, respectively.
Table 1: Respondents’ Profile (Category): Share in Total Sample |
Category of Respondents |
Share in Total (%) |
Target Share (%) |
Financial Sector Employees |
9.7 |
10.0 |
Other Employees |
16.1 |
15.0 |
Self-employed |
20.1 |
20.0 |
Housewives |
29.2 |
30.0 |
Retired Persons |
9.8 |
10.0 |
Daily Workers |
9.7 |
10.0 |
Others |
5.5 |
5.0 |
Note: The above sample proportion is for the round ended September 2014 survey. |
Table 2: Product-wise Expectations of Prices for Three-month ahead and One-year ahead |
(Percentage of respondents) |
Round No./survey period |
34 |
35 |
36 |
37 |
34 |
35 |
36 |
37 |
(Round ended) → |
Dec-13 |
Mar-14 |
Jun-14 |
Sep-14 |
Dec-13 |
Mar-14 |
Jun-14 |
Sep-14 |
Options: General |
Three-month ahead |
One-year ahead |
Prices will increase |
86.8 |
89.2 |
77.5 |
86.4 |
92.7 |
94.1 |
83.6 |
90.0 |
Price increase more than current rate |
55.3 |
51.2 |
41.2 |
43.9 |
61.1 |
59.0 |
47.4 |
48.0 |
Price increase similar to current rate |
24.0 |
28.4 |
21.5 |
28.8 |
25.1 |
25.7 |
22.0 |
27.4 |
Price increase less than current rate |
7.5 |
9.6 |
14.8 |
13.7 |
6.5 |
9.3 |
14.2 |
14.6 |
No change in prices |
9.5 |
8.3 |
12.7 |
9.0 |
4.0 |
3.5 |
7.4 |
5.5 |
Decline in price |
3.7 |
2.5 |
9.8 |
4.6 |
3.3 |
2.4 |
9.0 |
4.5 |
Options: Food Product |
Three-month ahead |
One-year ahead |
Prices will increase |
84.8 |
88.6 |
77.2 |
85.9 |
91.5 |
93.8 |
82.8 |
89.5 |
Price increase more than current rate |
50.9 |
51.9 |
42.3 |
41.9 |
58.5 |
57.6 |
47.0 |
46.2 |
Price increase similar to current rate |
25.5 |
26.3 |
21.5 |
28.1 |
26.2 |
26.3 |
21.3 |
27.7 |
Price increase less than current rate |
8.4 |
10.4 |
13.4 |
15.8 |
6.8 |
9.9 |
14.5 |
15.5 |
No change in prices |
9.9 |
8.7 |
13.9 |
9.0 |
5.0 |
4.0 |
7.9 |
5.8 |
Decline in price |
5.3 |
2.7 |
8.9 |
5.1 |
3.6 |
2.2 |
9.3 |
4.7 |
Options: Non-Food Product |
Three-month ahead |
One-year ahead |
Prices will increase |
78.8 |
80.6 |
73.1 |
78.5 |
87.5 |
87.5 |
79.5 |
83.8 |
Price increase more than current rate |
44.6 |
42.5 |
37.3 |
34.7 |
50.4 |
48.1 |
42.0 |
36.3 |
Price increase similar to current rate |
25.4 |
27.2 |
21.7 |
27.2 |
28.5 |
28.5 |
22.3 |
29.0 |
Price increase less than current rate |
8.8 |
10.8 |
14.1 |
16.5 |
8.5 |
10.8 |
15.3 |
18.4 |
No change in prices |
17.7 |
16.5 |
18.9 |
17.4 |
9.4 |
9.7 |
12.7 |
12.1 |
Decline in price |
3.6 |
3.0 |
8.0 |
4.2 |
3.2 |
2.9 |
7.8 |
4.1 |
Options: Household Durables |
Three-month ahead |
One-year ahead |
Prices will increase |
75.0 |
70.5 |
68.9 |
64.0 |
84.4 |
81.5 |
76.9 |
76.8 |
Price increase more than current rate |
42.0 |
35.4 |
35.3 |
27.2 |
49.1 |
44.2 |
42.1 |
33.9 |
Price increase similar to current rate |
24.0 |
23.1 |
20.0 |
22.7 |
26.2 |
25.6 |
20.7 |
26.1 |
Price increase less than current rate |
9.0 |
12.0 |
13.6 |
14.1 |
9.2 |
11.7 |
14.1 |
16.9 |
No change in prices |
19.4 |
21.1 |
20.9 |
24.3 |
10.9 |
12.4 |
13.9 |
15.0 |
Decline in price |
5.6 |
8.4 |
10.2 |
11.7 |
4.6 |
6.0 |
9.2 |
8.2 |
Options: Housing Prices |
Three-month ahead |
One-year ahead |
Prices will increase |
89.2 |
85.5 |
82.2 |
84.6 |
93.6 |
91.6 |
87.2 |
91.5 |
Price increase more than current rate |
66.9 |
58.0 |
55.4 |
55.5 |
71.0 |
66.2 |
59.7 |
60.8 |
Price increase similar to current rate |
17.9 |
21.1 |
17.0 |
20.3 |
18.5 |
19.2 |
17.8 |
22.5 |
Price increase less than current rate |
4.4 |
6.4 |
9.8 |
8.8 |
4.1 |
6.3 |
9.7 |
8.2 |
No change in prices |
8.1 |
10.2 |
11.1 |
11.4 |
3.8 |
4.4 |
6.0 |
5.0 |
Decline in price |
2.8 |
4.4 |
6.7 |
4.0 |
2.6 |
4.0 |
6.8 |
3.5 |
Options: Cost of Services |
Three-month ahead |
One-year ahead |
Prices will increase |
82.2 |
83.1 |
78.5 |
79.1 |
89.9 |
90.4 |
84.9 |
87.5 |
Price increase more than current rate |
49.7 |
48.0 |
46.4 |
38.8 |
56.2 |
54.8 |
50.6 |
45.4 |
Price increase similar to current rate |
25.7 |
26.5 |
19.4 |
25.3 |
26.3 |
25.4 |
20.7 |
26.9 |
Price increase less than current rate |
6.8 |
8.7 |
12.6 |
15.0 |
7.4 |
10.2 |
13.6 |
15.2 |
No change in prices |
15.3 |
14.5 |
16.2 |
18.0 |
7.6 |
7.2 |
9.3 |
9.8 |
Decline in price |
2.5 |
2.4 |
5.3 |
2.9 |
2.6 |
2.4 |
5.8 |
2.8 |
Table 3: Households 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 period ended |
Food |
Non-Food |
Households durables |
Housing |
Cost of services |
Three-month ahead period |
33 |
Sep-13 |
77.9 |
69.2 |
65.9 |
69.4 |
64.2 |
34 |
Dec-13 |
72.5 |
61.9 |
56.1 |
59.8 |
60.1 |
35 |
Mar-14 |
72.0 |
61.6 |
51.7 |
60.3 |
60.8 |
36 |
Jun-14 |
67.8 |
57.8 |
54.0 |
53.1 |
55.2 |
37 |
Sep-14 |
65.1 |
53.9 |
43.9 |
50.1 |
51.7 |
One-year ahead period |
33 |
Sep-13 |
81.6 |
73.2 |
70.9 |
74.8 |
71.8 |
34 |
Dec-13 |
77.8 |
68.8 |
65.2 |
66.7 |
70.0 |
35 |
Mar-14 |
77.9 |
67.7 |
61.3 |
69.4 |
69.9 |
36 |
Jun-14 |
74.0 |
66.5 |
64.3 |
62.1 |
65.1 |
37 |
Sep-14 |
69.1 |
59.0 |
53.3 |
57.7 |
59.7 |
Table 4: Household Inflation Expectations -Current, Three-Month Ahead and One-year Ahead |
Survey Round |
Survey period 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. |
33 |
Sep-13 |
11.8 |
11.0 |
4.3 |
12.8 |
14.5 |
4.0 |
13.5 |
16.0 |
4.0 |
34 |
Dec-13 |
12.3 |
13.2 |
4.4 |
12.2 |
13.9 |
4.7 |
13.5 |
16.0 |
4.0 |
35 |
Mar-14 |
12.2 |
13.3 |
4.3 |
12.3 |
12.9 |
4.1 |
13.1 |
15.3 |
4.3 |
36 |
Jun-14 |
12.6 |
13.3 |
4.0 |
12.5 |
14.0 |
4.4 |
12.8 |
15.0 |
4.3 |
37 |
Sep-14 |
12.7 |
13.8 |
4.0 |
12.7 |
14.6 |
4.4 |
13.5 |
16.0 |
4.0 |
Table 5: Factors that Explain the Total Variability |
Round No. |
Survey period
ended |
Current |
Three-month Ahead |
One-year Ahead |
33 |
Sep-13 |
City, Age group |
City, Age group |
City |
34 |
Dec-13 |
City, Gender, Age-group |
City, Category |
City, Category |
35 |
Mar-14 |
City, Category, Gender, Age-group |
City, Category, Gender |
City, Category, Gender |
36 |
Jun-14 |
City |
City |
City |
37 |
Sep-14 |
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- 2014 Survey Round |
|
Current |
Three-month Ahead |
One-year Ahead |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
Mean |
Median |
Std. Dev. |
Gender-wise |
Male |
12.7 |
13.8 |
3.9 |
12.5 |
14.3 |
4.5 |
13.3 |
15.8 |
4.1 |
Female |
12.7 |
14.0 |
4.0 |
12.9 |
15.1 |
4.3 |
13.8 |
16.1 |
3.8 |
Category-wise |
Financial Sector Employees |
12.4 |
13.0 |
4.0 |
12.4 |
14.1 |
4.5 |
13.1 |
15.2 |
4.0 |
Other Employees |
12.7 |
13.9 |
4.0 |
12.4 |
14.4 |
4.5 |
13.4 |
16.0 |
4.1 |
Self Employed |
12.6 |
13.7 |
3.9 |
12.5 |
14.3 |
4.4 |
13.4 |
15.7 |
4.0 |
Housewives |
12.9 |
14.2 |
3.9 |
13.0 |
15.3 |
4.2 |
14.0 |
16.1 |
3.7 |
Retired Persons |
13.1 |
14.4 |
3.7 |
13.1 |
15.0 |
4.1 |
13.5 |
16.0 |
4.1 |
Daily Workers |
12.8 |
14.2 |
4.1 |
12.7 |
15.2 |
4.6 |
13.5 |
16.1 |
4.3 |
Other category |
11.6 |
10.8 |
4.1 |
11.9 |
12.0 |
4.6 |
12.7 |
14.0 |
4.0 |
Age-wise |
Up to 25 years |
11.8 |
10.9 |
4.1 |
12.1 |
12.8 |
4.5 |
13.0 |
14.8 |
4.1 |
25 to 30 years |
12.2 |
12.5 |
4.1 |
12.1 |
12.8 |
4.5 |
13.3 |
15.4 |
4.0 |
30 to 35 years |
12.7 |
14.1 |
4.0 |
12.5 |
14.4 |
4.5 |
13.6 |
16.0 |
4.0 |
35 to 40 years |
12.8 |
13.9 |
3.9 |
13.0 |
15.5 |
4.2 |
13.5 |
16.0 |
4.0 |
40 to 45 years |
13.4 |
14.9 |
3.6 |
13.3 |
15.7 |
4.0 |
14.1 |
16.1 |
3.5 |
45 to 50 years |
13.1 |
14.5 |
3.9 |
13.0 |
15.2 |
4.3 |
13.8 |
16.1 |
3.8 |
50 to 55 years |
13.4 |
14.8 |
3.7 |
13.0 |
15.9 |
4.4 |
14.0 |
16.1 |
3.7 |
55 to 60 years |
13.5 |
14.6 |
3.4 |
13.1 |
15.3 |
4.3 |
13.7 |
16.1 |
4.1 |
60 years and above |
13.1 |
14.7 |
3.8 |
12.9 |
15.3 |
4.3 |
13.5 |
16.1 |
4.3 |
City-wise |
Ahmadabad |
12.1 |
13.8 |
4.1 |
13.1 |
15.1 |
4.2 |
13.4 |
15.8 |
4.1 |
Bangalore |
8.7 |
9.1 |
4.1 |
8.1 |
6.7 |
4.3 |
9.8 |
9.4 |
4.5 |
Bhopal |
10.6 |
9.7 |
4.0 |
11.7 |
10.9 |
3.7 |
13.0 |
14.2 |
3.6 |
Bhubaneswar |
11.7 |
11.0 |
4.1 |
11.7 |
12.2 |
4.6 |
13.1 |
14.5 |
3.8 |
Chennai |
12.8 |
15.5 |
4.4 |
13.0 |
16.0 |
4.4 |
13.6 |
16.1 |
4.2 |
Delhi |
13.2 |
15.5 |
3.9 |
13.3 |
16.1 |
4.5 |
14.3 |
16.2 |
3.5 |
Guwahati |
15.6 |
16.3 |
2.0 |
15.6 |
16.4 |
2.5 |
15.0 |
16.4 |
3.9 |
Hyderabad |
10.3 |
10.4 |
3.1 |
12.1 |
12.0 |
3.2 |
13.1 |
14.3 |
3.4 |
Jaipur |
12.3 |
11.6 |
3.6 |
12.4 |
13.7 |
4.0 |
13.8 |
15.7 |
3.6 |
Kolhapur |
13.8 |
13.9 |
3.0 |
13.6 |
16.1 |
4.1 |
13.1 |
16.0 |
4.4 |
Kolkata |
14.1 |
15.4 |
3.0 |
12.5 |
15.6 |
4.9 |
14.1 |
16.2 |
3.8 |
Lucknow |
14.2 |
16.2 |
3.6 |
14.8 |
16.3 |
3.4 |
14.7 |
16.3 |
3.5 |
Mumbai |
11.5 |
10.8 |
3.6 |
10.6 |
10.6 |
4.4 |
11.4 |
10.8 |
4.0 |
Nagpur |
15.4 |
16.2 |
2.2 |
15.6 |
16.4 |
2.2 |
15.6 |
16.4 |
2.4 |
Patna |
11.3 |
10.5 |
3.0 |
12.3 |
11.9 |
2.8 |
13.1 |
13.4 |
3.1 |
Thiruvananthapuram |
14.5 |
16.1 |
3.0 |
12.1 |
14.5 |
4.8 |
14.8 |
16.3 |
3.5 |
All |
12.7 |
13.8 |
4.0 |
12.7 |
14.6 |
4.4 |
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 |
4 |
|
|
1 |
|
|
|
|
|
1 |
|
|
|
|
|
|
1 |
1 |
8 |
1-2 |
|
9 |
6 |
4 |
2 |
1 |
|
|
|
|
|
|
|
|
|
|
1 |
3 |
26 |
2-3 |
|
2 |
9 |
3 |
9 |
3 |
1 |
|
|
|
1 |
1 |
1 |
|
|
1 |
1 |
3 |
35 |
3-4 |
|
3 |
4 |
8 |
7 |
8 |
4 |
1 |
|
1 |
1 |
|
|
|
|
|
|
|
37 |
4-5 |
|
5 |
4 |
6 |
36 |
17 |
19 |
8 |
2 |
9 |
2 |
|
|
1 |
5 |
|
1 |
7 |
122 |
5-6 |
|
1 |
1 |
9 |
13 |
19 |
29 |
32 |
12 |
15 |
10 |
2 |
1 |
|
1 |
1 |
3 |
7 |
156 |
6-7 |
|
|
1 |
2 |
9 |
5 |
16 |
28 |
18 |
14 |
3 |
1 |
|
1 |
2 |
1 |
1 |
4 |
106 |
7-8 |
|
|
|
2 |
3 |
7 |
11 |
31 |
37 |
33 |
19 |
4 |
2 |
1 |
1 |
|
|
8 |
159 |
8-9 |
|
|
|
1 |
7 |
6 |
4 |
12 |
11 |
37 |
33 |
7 |
4 |
3 |
1 |
2 |
4 |
8 |
140 |
9-10 |
|
|
2 |
9 |
40 |
17 |
5 |
8 |
12 |
84 |
51 |
94 |
39 |
13 |
52 |
14 |
43 |
37 |
520 |
10-11 |
|
13 |
17 |
14 |
16 |
36 |
5 |
11 |
12 |
15 |
117 |
65 |
95 |
39 |
38 |
55 |
65 |
40 |
653 |
11-12 |
|
7 |
5 |
2 |
1 |
2 |
1 |
1 |
1 |
6 |
3 |
16 |
16 |
20 |
22 |
12 |
11 |
2 |
128 |
12-13 |
|
1 |
6 |
5 |
8 |
3 |
|
3 |
1 |
2 |
13 |
31 |
17 |
18 |
18 |
15 |
31 |
10 |
182 |
13-14 |
|
2 |
4 |
5 |
4 |
7 |
1 |
|
|
6 |
15 |
2 |
33 |
7 |
12 |
31 |
86 |
18 |
233 |
14-15 |
|
5 |
3 |
3 |
11 |
8 |
4 |
3 |
|
14 |
11 |
6 |
3 |
3 |
30 |
28 |
164 |
44 |
340 |
15-16 |
|
|
11 |
3 |
1 |
10 |
|
|
1 |
3 |
11 |
|
4 |
|
1 |
51 |
97 |
21 |
214 |
>=16 |
|
|
|
|
|
36 |
5 |
7 |
5 |
76 |
59 |
7 |
6 |
1 |
14 |
23 |
1446 |
189 |
1874 |
Total |
4 |
48 |
73 |
77 |
167 |
185 |
105 |
145 |
112 |
316 |
349 |
236 |
221 |
107 |
197 |
234 |
1955 |
402 |
4933 |
Note: The shaded cells represent the number of respondents who expressed double digit current and three-month ahead inflations. |
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 |
5 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
1 |
|
|
1 |
8 |
1-2 |
6 |
5 |
5 |
4 |
1 |
|
|
1 |
|
|
1 |
|
|
|
1 |
|
|
2 |
26 |
2-3 |
|
4 |
6 |
3 |
4 |
3 |
|
2 |
1 |
|
3 |
|
|
|
1 |
|
2 |
6 |
35 |
3-4 |
|
1 |
6 |
8 |
8 |
|
1 |
2 |
1 |
5 |
1 |
|
|
|
1 |
|
1 |
2 |
37 |
4-5 |
1 |
|
1 |
5 |
33 |
18 |
8 |
9 |
|
17 |
7 |
|
1 |
|
3 |
2 |
5 |
12 |
122 |
5-6 |
|
|
3 |
2 |
19 |
37 |
14 |
4 |
8 |
14 |
18 |
2 |
5 |
2 |
2 |
5 |
7 |
14 |
156 |
6-7 |
|
|
|
2 |
4 |
5 |
23 |
18 |
5 |
10 |
14 |
3 |
2 |
|
4 |
1 |
6 |
9 |
106 |
7-8 |
|
|
|
|
1 |
4 |
18 |
32 |
15 |
16 |
17 |
8 |
17 |
4 |
6 |
4 |
3 |
14 |
159 |
8-9 |
1 |
|
|
|
2 |
|
6 |
13 |
37 |
19 |
14 |
9 |
8 |
3 |
3 |
8 |
5 |
12 |
140 |
9-10 |
|
2 |
2 |
2 |
4 |
7 |
2 |
7 |
41 |
138 |
44 |
22 |
25 |
10 |
66 |
26 |
81 |
41 |
520 |
10-11 |
3 |
|
3 |
4 |
5 |
16 |
4 |
3 |
8 |
62 |
144 |
67 |
27 |
22 |
47 |
74 |
99 |
65 |
653 |
11-12 |
1 |
1 |
|
|
1 |
2 |
|
2 |
2 |
3 |
12 |
23 |
12 |
5 |
10 |
22 |
28 |
4 |
128 |
12-13 |
2 |
1 |
1 |
|
3 |
1 |
|
1 |
3 |
31 |
7 |
7 |
35 |
13 |
8 |
12 |
50 |
7 |
182 |
13-14 |
5 |
1 |
1 |
1 |
1 |
4 |
|
3 |
1 |
6 |
10 |
35 |
4 |
9 |
11 |
20 |
108 |
13 |
233 |
14-15 |
5 |
2 |
|
|
1 |
4 |
1 |
|
|
12 |
6 |
3 |
4 |
20 |
64 |
25 |
158 |
35 |
340 |
15-16 |
|
|
1 |
|
3 |
1 |
|
1 |
1 |
2 |
8 |
1 |
2 |
|
15 |
59 |
104 |
16 |
214 |
>=16 |
4 |
1 |
1 |
1 |
2 |
4 |
1 |
1 |
1 |
10 |
11 |
|
1 |
|
11 |
20 |
1621 |
184 |
1874 |
Total |
33 |
18 |
30 |
32 |
93 |
106 |
78 |
99 |
124 |
345 |
317 |
180 |
143 |
88 |
254 |
278 |
2278 |
437 |
4933 |
| Note: The shaded cells represent the number of respondents who expressed double digit current and one-year ahead inflations. |
|