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Date : Jun 07, 2024
Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of May 2024 round of its bi-monthly inflation expectations survey of households (IESH)1 2. The survey was conducted during May 2-11, 2024 in 19 major cities, with responses from 5,943 urban households. Female respondents accounted for 52.6 per cent of this sample.

Highlights:

  1. Households’ inflation expectations for the three months and one year ahead periods increased by 20 basis points (bps) and 10 bps, respectively, but remained in single digits; their perception on current inflation, however, moderated by 10 bps and stood at 8.0 per cent in the latest survey round [Charts 1a and 1b; Table 3].

  2. Higher share of respondents expected prices and inflation to rise for all major product groups over the next three months as well as one-year periods [Tables 1(a) and 1(b)].

  3. At the aggregate level, female respondents had marginally lower inflation assessment and expectations than their male counterparts [Table 2].

  4. Among occupation categories, self-employed respondents group expected highest inflation [Table 2].

  5. For one year horizon, households’ expectations on general prices remained closely aligned with their assessment related to food prices and housing [Table 4].

Chart 1. Median Inflation Rate Perception and Three Months ahead Expectation

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-23 Nov-23 Jan-24 Mar-24 May-24
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 81.2 0.82 74.1 0.93 78.2 0.84 76.5 0.85 80.6 0.81
Price increase more than current rate 59.7 1.08 50.8 1.13 54.4 1.09 53.1 1.08 59.1 1.13
Price increase similar to current rate 17.9 0.77 19.1 0.85 19.5 0.80 18.2 0.79 17.5 0.83
Price increase less than current rate 3.5 0.41 4.2 0.42 4.2 0.43 5.2 0.44 4.0 0.43
No changes in prices 15.7 0.77 21.2 0.88 18.3 0.79 19.6 0.80 16.6 0.77
Decline in prices 3.1 0.35 4.7 0.45 3.6 0.37 3.9 0.38 2.8 0.32
Food Product                    
Prices will increase 82.7 0.73 75.5 0.90 80.2 0.77 76.7 0.81 81.8 0.74
Price increase more than current rate 61.8 1.00 53.7 1.04 59.3 1.00 54.4 1.00 61.0 1.07
Price increase similar to current rate 16.2 0.71 16.1 0.74 15.6 0.72 15.7 0.69 15.3 0.74
Price increase less than current rate 4.7 0.42 5.8 0.47 5.4 0.45 6.6 0.50 5.5 0.46
No changes in prices 11.0 0.61 15.5 0.76 12.3 0.65 15.1 0.68 12.1 0.64
Decline in prices 6.3 0.48 9.0 0.57 7.5 0.51 8.2 0.54 6.1 0.46
Non- Food Product                    
Prices will increase 78.4 0.84 73.8 0.87 74.0 0.85 71.5 0.87 75.0 0.85
Price increase more than current rate 57.1 1.08 52.4 1.04 52.3 1.03 48.9 1.01 53.7 1.11
Price increase similar to current rate 16.6 0.70 16.1 0.72 16.4 0.71 16.2 0.71 15.6 0.72
Price increase less than current rate 4.6 0.43 5.3 0.46 5.2 0.45 6.4 0.48 5.7 0.50
No changes in prices 16.2 0.74 19.5 0.77 18.6 0.76 20.9 0.80 19.3 0.78
Decline in prices 5.4 0.45 6.7 0.48 7.4 0.52 7.7 0.51 5.7 0.43
Household Durables                    
Prices will increase 68.2 0.90 63.8 0.98 65.5 0.93 64.7 0.92 68.2 0.94
Price increase more than current rate 49.5 1.06 45.5 1.02 46.3 1.04 43.8 1.01 48.3 1.10
Price increase similar to current rate 14.8 0.67 13.4 0.68 14.5 0.65 15.5 0.70 15.2 0.74
Price increase less than current rate 3.9 0.38 4.9 0.43 4.7 0.42 5.4 0.44 4.7 0.44
No changes in prices 24.6 0.86 25.9 0.89 25.2 0.85 26.1 0.85 23.4 0.86
Decline in prices 7.2 0.51 10.3 0.59 9.4 0.57 9.2 0.57 8.5 0.53
Cost of Housing                    
Prices will increase 78.1 0.82 76.8 0.88 78.4 0.83 76.9 0.83 80.4 0.81
Price increase more than current rate 59.4 1.06 57.2 1.09 58.2 1.05 55.8 1.07 59.3 1.06
Price increase similar to current rate 15.1 0.74 15.5 0.72 16.1 0.72 16.4 0.74 16.7 0.77
Price increase less than current rate 3.7 0.35 4.1 0.37 4.0 0.41 4.7 0.40 4.3 0.44
No changes in prices 18.7 0.79 20.0 0.83 18.1 0.79 19.6 0.78 16.7 0.77
Decline in prices 3.2 0.36 3.2 0.36 3.6 0.34 3.5 0.36 3.0 0.34
Cost of Services                    
Prices will increase 70.6 0.89 63.3 0.96 65.0 0.93 65.0 0.97 68.6 0.98
Price increase more than current rate 51.3 1.00 43.7 1.09 46.1 1.02 45.5 1.09 49.2 1.12
Price increase similar to current rate 15.8 0.69 15.5 0.70 15.0 0.69 14.4 0.70 14.4 0.68
Price increase less than current rate 3.5 0.37 4.2 0.40 3.8 0.37 5.2 0.45 5.0 0.46
No changes in prices 26.2 0.87 31.5 0.93 30.5 0.91 30.1 0.92 27.3 0.94
Decline in prices 3.2 0.34 5.1 0.48 4.5 0.41 4.8 0.43 4.1 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 1(b): Product-wise Expectations of Prices for One Year ahead
(Percentage of Respondents)
Survey period ended May-23 Nov-23 Jan-24 Mar-24 May-24
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 89.6 0.61 89.0 0.65 88.7 0.63 87.4 0.67 89.1 0.64
Price increase more than current rate 70.2 1.05 67.2 1.07 66.3 1.06 64.7 1.08 67.9 1.14
Price increase similar to current rate 16.7 0.77 18.4 0.87 19.1 0.83 18.5 0.83 17.8 0.90
Price increase less than current rate 2.7 0.32 3.4 0.38 3.3 0.36 4.2 0.41 3.5 0.41
No changes in prices 7.3 0.50 8.4 0.56 8.2 0.55 9.7 0.59 7.9 0.56
Decline in prices 3.1 0.35 2.7 0.35 3.0 0.36 2.9 0.35 3.0 0.34
Food Product                    
Prices will increase 86.9 0.66 86.1 0.71 86.4 0.68 84.5 0.73 86.0 0.68
Price increase more than current rate 64.6 0.99 63.2 1.06 63.6 1.03 59.5 1.10 62.8 1.10
Price increase similar to current rate 18.3 0.77 18.4 0.83 18.2 0.77 19.8 0.80 18.3 0.86
Price increase less than current rate 4.0 0.40 4.5 0.41 4.7 0.43 5.2 0.45 4.9 0.49
No changes in prices 8.0 0.51 8.8 0.56 8.7 0.53 10.1 0.61 9.3 0.58
Decline in prices 5.2 0.44 5.1 0.44 4.9 0.43 5.4 0.44 4.7 0.39
Non- Food Product                    
Prices will increase 84.1 0.72 82.6 0.78 82.0 0.80 81.1 0.76 82.1 0.79
Price increase more than current rate 62.0 1.05 60.7 1.09 59.1 1.11 56.3 1.09 59.8 1.13
Price increase similar to current rate 17.9 0.77 17.4 0.80 18.6 0.79 19.5 0.82 17.3 0.80
Price increase less than current rate 4.2 0.41 4.5 0.42 4.4 0.41 5.3 0.47 5.1 0.47
No changes in prices 11.1 0.61 12.9 0.65 13.1 0.66 14.1 0.69 12.9 0.68
Decline in prices 4.8 0.43 4.5 0.43 4.8 0.45 4.8 0.44 5.0 0.44
Household Durables                    
Prices will increase 76.9 0.83 75.5 0.89 74.8 0.84 74.5 0.83 76.8 0.83
Price increase more than current rate 57.0 1.07 55.3 1.07 54.0 1.06 52.3 1.06 56.0 1.12
Price increase similar to current rate 16.1 0.72 16.3 0.77 16.7 0.69 17.3 0.76 16.4 0.79
Price increase less than current rate 3.7 0.37 3.9 0.39 4.1 0.41 5.0 0.45 4.4 0.44
No changes in prices 16.7 0.71 17.7 0.76 18.3 0.75 18.1 0.76 16.6 0.72
Decline in prices 6.4 0.48 6.8 0.50 6.9 0.49 7.4 0.51 6.6 0.47
Cost of Housing                    
Prices will increase 87.9 0.63 87.9 0.68 88.0 0.65 87.2 0.66 89.2 0.64
Price increase more than current rate 67.4 1.00 68.5 1.02 67.7 0.96 65.6 1.01 68.7 1.02
Price increase similar to current rate 17.1 0.76 16.3 0.78 16.7 0.74 17.2 0.74 16.3 0.75
Price increase less than current rate 3.4 0.34 3.1 0.36 3.6 0.40 4.4 0.39 4.2 0.45
No changes in prices 9.1 0.54 9.4 0.61 9.1 0.55 9.5 0.57 8.4 0.57
Decline in prices 3.0 0.34 2.7 0.34 2.9 0.34 3.3 0.36 2.4 0.31
Cost of Services                    
Prices will increase 83.2 0.72 80.8 0.81 79.5 0.78 80.1 0.78 82.1 0.77
Price increase more than current rate 61.1 1.05 59.2 1.08 58.8 1.03 56.3 1.08 58.9 1.13
Price increase similar to current rate 18.2 0.81 17.6 0.80 16.6 0.72 18.9 0.78 18.6 0.83
Price increase less than current rate 3.9 0.36 4.0 0.40 4.1 0.40 4.9 0.45 4.6 0.44
No changes in prices 13.7 0.64 16.3 0.74 17.0 0.72 16.0 0.71 14.7 0.71
Decline in prices 3.1 0.34 2.9 0.36 3.5 0.37 3.9 0.38 3.2 0.34
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: May-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 8.7 0.10 8.0 0.13 9.8 0.10 9.2 0.19 9.6 0.12 9.9 0.19
Gender-wise                        
Male 8.9 0.13 8.3 0.19 9.9 0.13 9.5 0.27 9.7 0.16 10.0 0.23
Female 8.6 0.12 8.0 0.16 9.7 0.13 9.1 0.20 9.6 0.15 9.8 0.23
Category-wise                        
Financial Sector Employees 8.8 0.52 8.2 0.40 9.8 0.51 9.3 0.57 9.5 0.62 9.5 0.53
Other Employees 8.7 0.19 8.0 0.27 9.7 0.20 9.1 0.30 9.8 0.23 9.8 0.32
Self Employed 9.2 0.20 8.6 0.35 10.2 0.22 9.9 0.31 9.7 0.26 10.0 0.30
Homemaker 8.5 0.14 7.9 0.20 9.6 0.15 8.9 0.21 9.6 0.18 9.8 0.25
Retired Persons 9.2 0.36 8.7 0.67 10.4 0.37 9.7 0.75 9.9 0.44 9.9 0.74
Daily Workers 8.5 0.24 8.0 0.33 9.5 0.25 9.1 0.47 8.7 0.32 8.7 0.44
Other category 8.2 0.20 7.3 0.25 9.4 0.22 8.8 0.33 9.7 0.26 9.6 0.42
Age Group-wise                        
Up to 25 years 8.1 0.18 7.3 0.23 9.3 0.20 8.6 0.26 9.6 0.22 9.4 0.35
25 to 30 years 8.6 0.18 7.8 0.25 9.7 0.19 9.2 0.30 9.8 0.21 10.0 0.26
30 to 35 years 8.8 0.20 8.0 0.24 9.7 0.21 9.0 0.32 9.6 0.25 9.7 0.44
35 to 40 years 8.7 0.19 8.0 0.25 9.7 0.20 9.1 0.36 9.5 0.24 9.5 0.38
40 to 45 years 8.8 0.22 8.1 0.27 9.8 0.23 9.0 0.33 9.4 0.27 9.4 0.41
45 to 50 years 8.7 0.22 8.3 0.30 9.8 0.23 9.7 0.42 9.5 0.28 10.0 0.33
50 to 55 years 9.3 0.25 9.2 0.44 10.5 0.28 10.3 0.22 10.0 0.33 10.4 0.22
55 to 60 years 9.1 0.30 8.5 0.31 10.0 0.32 9.0 0.52 9.6 0.38 9.8 0.49
60 years and above 9.2 0.27 9.2 0.65 10.3 0.28 9.9 0.49 9.9 0.34 10.0 0.50
City-wise                        
Ahmedabad 7.4 0.44 6.3 0.39 8.8 0.55 7.6 0.61 8.2 0.65 7.4 0.54
Bengaluru 7.1 0.27 5.8 0.17 8.4 0.27 7.5 0.28 8.9 0.30 8.5 0.39
Bhopal 8.5 0.45 7.6 0.99 10.1 0.47 10.3 0.49 9.0 0.68 9.7 0.93
Bhubaneswar 8.6 0.48 7.8 1.02 10.3 0.52 10.0 1.11 10.5 0.61 10.5 1.11
Chennai 10.1 0.53 10.1 0.54 11.4 0.56 11.2 0.87 11.7 0.52 12.7 1.59
Delhi 8.9 0.23 8.6 0.47 10.0 0.26 9.7 0.41 10.0 0.30 10.1 0.39
Guwahati 8.0 0.44 7.5 0.77 8.7 0.57 8.1 0.85 9.6 0.95 9.5 1.02
Hyderabad 7.7 0.32 6.9 0.41 8.6 0.28 8.1 0.32 8.8 0.35 9.0 0.40
Jaipur 7.5 0.28 7.2 0.40 8.3 0.34 7.7 0.43 7.4 0.63 7.4 0.53
Jammu 10.2 0.65 9.4 0.97 12.4 0.84 12.8 1.30 12.5 0.75 12.9 1.26
Kolkata 10.6 0.29 10.3 0.16 11.7 0.28 11.2 0.58 11.6 0.30 11.8 0.77
Lucknow 9.2 0.60 8.6 0.90 9.6 0.50 9.3 0.79 9.7 0.51 9.6 0.65
Mumbai 8.9 0.24 8.2 0.23 9.9 0.25 9.3 0.35 9.2 0.29 9.8 0.37
Nagpur 8.4 0.48 8.0 0.71 9.7 0.46 9.3 0.75 9.1 0.69 10.1 0.62
Patna 7.4 0.38 7.2 0.46 8.0 0.53 7.5 0.52 7.6 0.43 7.6 0.58
Thiruvananthapuram 8.0 0.58 6.3 0.67 9.3 0.53 8.0 0.49 10.7 0.55 10.3 0.44
Chandigarh 10.8 0.71 10.0 0.62 10.9 0.78 10.4 0.65 10.7 0.78 10.4 0.98
Ranchi 8.5 0.35 7.9 0.29 8.8 0.35 8.1 0.45 7.8 0.59 8.3 0.77
Raipur 10.1 0.61 9.7 0.62 10.6 0.66 9.9 0.89 9.4 0.93 10.6 0.89
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
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
Nov-23 8.9 0.09 8.2 0.12 9.7 0.09 9.1 0.18 9.6 0.10 10.1 0.10
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
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
May-23 67.4 68.6 63.4 67.1 69.1
Nov-23 66.5 61.8 57.0 60.7 66.4
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
One Year Ahead
May-23 75.6 75.3 70.7 76.1 76.4
Nov-23 74.8 73.9 68.1 75.3 73.9
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

Table 5(a): Cross-tabulation of Number of Respondents by Current Inflation Perception and Three Months Ahead Inflation Expectations: May-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 7 2 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 11
1-<2 0 23 14 3 1 2 0 0 0 0 1 0 0 0 0 0 0 0 44
2-<3 1 13 100 68 41 10 1 1 0 2 1 0 0 1 0 0 0 0 239
3-<4 0 2 10 92 82 49 13 1 0 1 1 0 0 2 6 0 0 0 259
4-<5 0 0 10 15 119 94 49 9 9 3 4 0 1 5 6 0 0 0 324
5-<6 1 4 9 30 23 412 205 225 100 9 79 6 0 9 7 11 0 0 1130
6-<7 0 0 1 4 7 10 196 106 78 17 12 9 1 0 5 3 9 0 458
7-<8 0 1 0 1 2 14 14 194 123 60 59 2 9 6 4 0 1 0 490
8-<9 0 0 0 2 2 9 12 7 190 121 109 15 24 8 6 4 2 0 511
9-<10 0 0 0 1 2 4 3 5 3 96 89 36 24 9 17 5 3 0 297
10-<11 0 1 2 2 3 25 3 10 12 9 352 78 166 48 16 230 77 0 1034
11-<12 0 0 0 0 0 0 0 0 0 1 1 8 29 4 6 10 0 0 59
12-<13 0 0 0 2 2 4 0 1 3 1 3 0 35 15 32 34 9 0 141
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 1 14 3 9 2 0 29
14-<15 0 0 1 0 0 0 0 0 0 0 1 0 0 0 9 4 6 0 21
15-<16 0 0 0 0 0 1 0 0 1 0 8 0 0 0 3 89 119 1 222
>=16 0 0 0 2 0 3 1 1 0 0 16 0 0 1 0 11 637 2 674
Total 9 46 147 223 284 637 497 560 519 320 737 154 290 122 120 410 865 3 5943

Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: May-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 5 1 1 1 0 1 0 0 0 0 2 0 0 0 0 0 0 0 11
1-<2 10 9 6 9 4 4 0 0 0 0 2 0 0 0 0 0 0 0 44
2-<3 38 3 41 59 51 27 5 5 3 2 0 1 1 1 1 0 1 0 239
3-<4 28 1 7 34 75 57 24 9 4 4 7 1 0 2 6 0 0 0 259
4-<5 47 0 1 7 71 70 47 22 23 6 14 9 2 3 2 0 0 0 324
5-<6 144 0 1 13 12 184 135 223 127 40 196 8 7 7 11 13 9 0 1130
6-<7 45 0 1 2 8 5 89 96 86 30 48 12 11 5 3 7 10 0 458
7-<8 55 0 0 1 0 4 7 101 104 64 91 15 22 8 7 10 1 0 490
8-<9 52 0 0 0 0 5 5 3 98 76 153 22 46 13 11 19 8 0 511
9-<10 21 0 0 0 0 0 0 2 2 63 69 52 45 11 9 14 9 0 297
10-<11 97 0 0 2 2 8 3 2 13 6 196 38 141 38 24 267 197 0 1034
11-<12 2 0 0 0 0 0 0 0 0 0 0 6 3 28 2 18 0 0 59
12-<13 9 0 0 1 1 1 0 0 3 0 7 0 16 8 22 49 24 0 141
13-<14 0 0 0 0 0 0 0 0 0 0 0 0 0 15 3 9 2 0 29
14-<15 1 0 0 0 0 0 0 0 0 0 0 0 0 0 9 4 7 0 21
15-<16 22 0 0 0 0 1 0 0 2 0 2 0 0 0 1 51 143 0 222
>=16 74 0 0 0 0 3 0 0 1 0 6 0 0 0 0 12 578 0 674
Total 650 14 58 129 224 370 315 463 466 291 793 164 294 139 111 473 989 0 5943

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 April 05, 2024. Unit-level data for previous rounds of the survey are available on the Bank’s ‘Database on Indian Economy’ (DBIE) portal (weblink: https://dbie.rbi.org.in/#/dbie/home) under the head ‘Unit-level Data’.

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