Inflation Expectations Survey of Households: September 2013 (Round 33)

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പ്രസിദ്ധീകരിച്ചത് ഒക്‌ടോബർ 28, 2013

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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:

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.
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.
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.
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.
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.
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.
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
Category of Respondents	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.