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Households’ Inflation Expectations Survey

Today, the Reserve Bank released the results of March 2024 round of its bi-monthly inflation expectations survey of households (IESH)1 2. The survey was conducted during March 2-11, 2024 in 19 major cities, with responses from 6,083 urban households. Female respondents accounted for 50.8 per cent of this sample.

Highlights:

  1. Households’ inflation expectations for both three months and one year ahead moderated by 20 basis points (bps) each to 9.0 per cent and 9.8 per cent, respectively; their perception on current inflation, however, remained unchanged at 8.1 per cent [Charts 1(a) and 1(b); Table 3].

  2. The share of households expecting overall prices and inflation to increase over the next three months and one year moderated for general prices as well as for most of the product groups, when compared to the previous survey round [Tables 1(a) and 1(b)].

  3. Median inflation expectation was relatively low for respondents below 25 years in age among all age-groups; in occupation category, it was lower among financial sector employees [Table 2].

  4. Households’ expectations on general price for one year horizon remained closely aligned with food prices and housing related expenses [Table 4].

Chart 1a and 1b

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 Mar-23 Sep-23 Nov-23 Jan-24 Mar-24
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 83.8 0.83 74.2 0.97 74.1 0.93 78.2 0.84 76.5 0.85
Price increase more than current rate 60.6 1.17 49.5 1.10 50.8 1.13 54.4 1.09 53.1 1.08
Price increase similar to current rate 19.8 0.87 20.0 0.80 19.1 0.85 19.5 0.80 18.2 0.79
Price increase less than current rate 3.5 0.36 4.7 0.47 4.2 0.42 4.2 0.43 5.2 0.44
No changes in prices 13.3 0.74 20.7 0.88 21.2 0.88 18.3 0.79 19.6 0.80
Decline in prices 2.8 0.41 5.0 0.52 4.7 0.45 3.6 0.37 3.9 0.38
Food Product                    
Prices will increase 84.0 0.75 75.4 0.87 75.5 0.90 80.2 0.77 76.7 0.81
Price increase more than current rate 62.1 1.12 55.1 1.05 53.7 1.04 59.3 1.00 54.4 1.00
Price increase similar to current rate 16.9 0.79 15.1 0.71 16.1 0.74 15.6 0.72 15.7 0.69
Price increase less than current rate 5.1 0.42 5.3 0.46 5.8 0.47 5.4 0.45 6.6 0.50
No changes in prices 9.7 0.59 13.2 0.68 15.5 0.76 12.3 0.65 15.1 0.68
Decline in prices 6.3 0.53 11.3 0.66 9.0 0.57 7.5 0.51 8.2 0.54
Non- Food Product                    
Prices will increase 81.3 0.79 69.2 0.93 73.8 0.87 74.0 0.85 71.5 0.87
Price increase more than current rate 58.6 1.10 47.1 1.04 52.4 1.04 52.3 1.03 48.9 1.01
Price increase similar to current rate 17.7 0.80 16.7 0.72 16.1 0.72 16.4 0.71 16.2 0.71
Price increase less than current rate 5.1 0.43 5.4 0.51 5.3 0.46 5.2 0.45 6.4 0.48
No changes in prices 13.3 0.67 20.5 0.77 19.5 0.77 18.6 0.76 20.9 0.80
Decline in prices 5.4 0.51 10.3 0.66 6.7 0.48 7.4 0.52 7.7 0.51
Household Durables                    
Prices will increase 67.9 0.92 62.2 0.99 63.8 0.98 65.5 0.93 64.7 0.92
Price increase more than current rate 47.8 1.09 43.2 1.05 45.5 1.02 46.3 1.04 43.8 1.01
Price increase similar to current rate 15.8 0.75 14.1 0.65 13.4 0.68 14.5 0.65 15.5 0.70
Price increase less than current rate 4.2 0.41 4.9 0.43 4.9 0.43 4.7 0.42 5.4 0.44
No changes in prices 22.4 0.85 26.4 0.88 25.9 0.89 25.2 0.85 26.1 0.85
Decline in prices 9.7 0.60 11.3 0.64 10.3 0.59 9.4 0.57 9.2 0.57
Cost of Housing                    
Prices will increase 78.2 0.92 75.1 0.95 76.8 0.88 78.4 0.83 76.9 0.83
Price increase more than current rate 57.7 1.14 54.3 1.09 57.2 1.09 58.2 1.05 55.8 1.07
Price increase similar to current rate 16.7 0.76 16.3 0.66 15.5 0.72 16.1 0.72 16.4 0.74
Price increase less than current rate 3.8 0.39 4.5 0.43 4.1 0.37 4.0 0.41 4.7 0.40
No changes in prices 18.1 0.83 20.9 0.90 20.0 0.83 18.1 0.79 19.6 0.78
Decline in prices 3.7 0.44 4.1 0.46 3.2 0.36 3.6 0.34 3.5 0.36
Cost of Services                    
Prices will increase 73.2 0.90 63.0 1.04 63.3 0.96 65.0 0.93 65.0 0.97
Price increase more than current rate 51.7 1.11 44.7 1.05 43.7 1.09 46.1 1.02 45.5 1.09
Price increase similar to current rate 17.8 0.76 14.5 0.68 15.5 0.70 15.0 0.69 14.4 0.70
Price increase less than current rate 3.6 0.37 3.9 0.40 4.2 0.40 3.8 0.37 5.2 0.45
No changes in prices 23.2 0.86 31.2 0.99 31.5 0.93 30.5 0.91 30.1 0.92
Decline in prices 3.6 0.40 5.7 0.54 5.1 0.48 4.5 0.41 4.8 0.43
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 Mar-23 Sep-23 Nov-23 Jan-24 Mar-24
General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE
Prices will increase 90.4 0.66 86.2 0.74 89.0 0.65 88.7 0.63 87.4 0.67
Price increase more than current rate 69.3 1.11 62.2 1.05 67.2 1.07 66.3 1.06 64.7 1.08
Price increase similar to current rate 18.1 0.87 19.9 0.81 18.4 0.87 19.1 0.83 18.5 0.83
Price increase less than current rate 3.0 0.33 4.1 0.43 3.4 0.38 3.3 0.36 4.2 0.41
No changes in prices 6.4 0.50 9.6 0.59 8.4 0.56 8.2 0.55 9.7 0.59
Decline in prices 3.2 0.43 4.2 0.48 2.7 0.35 3.0 0.36 2.9 0.35
Food Product                    
Prices will increase 86.3 0.71 82.8 0.80 86.1 0.71 86.4 0.68 84.5 0.73
Price increase more than current rate 63.7 1.16 57.9 1.09 63.2 1.06 63.6 1.03 59.5 1.10
Price increase similar to current rate 18.5 0.86 19.7 0.82 18.4 0.83 18.2 0.77 19.8 0.80
Price increase less than current rate 4.1 0.38 5.3 0.48 4.5 0.41 4.7 0.43 5.2 0.45
No changes in prices 8.1 0.53 9.6 0.58 8.8 0.56 8.7 0.53 10.1 0.61
Decline in prices 5.6 0.52 7.6 0.60 5.1 0.44 4.9 0.43 5.4 0.44
Non- Food Product                    
Prices will increase 85.4 0.73 78.9 0.83 82.6 0.78 82.0 0.80 81.1 0.76
Price increase more than current rate 62.9 1.12 54.7 1.05 60.7 1.09 59.1 1.11 56.3 1.09
Price increase similar to current rate 18.2 0.78 19.7 0.78 17.4 0.80 18.6 0.79 19.5 0.82
Price increase less than current rate 4.3 0.40 4.5 0.44 4.5 0.42 4.4 0.41 5.3 0.47
No changes in prices 9.4 0.55 13.9 0.66 12.9 0.65 13.1 0.66 14.1 0.69
Decline in prices 5.2 0.51 7.2 0.57 4.5 0.43 4.8 0.45 4.8 0.44
Household Durables                    
Prices will increase 76.5 0.85 73.9 0.91 75.5 0.89 74.8 0.84 74.5 0.83
Price increase more than current rate 55.8 1.15 52.4 1.04 55.3 1.07 54.0 1.06 52.3 1.06
Price increase similar to current rate 16.9 0.80 17.3 0.71 16.3 0.77 16.7 0.69 17.3 0.76
Price increase less than current rate 3.8 0.38 4.1 0.42 3.9 0.39 4.1 0.41 5.0 0.45
No changes in prices 15.4 0.70 18.5 0.76 17.7 0.76 18.3 0.75 18.1 0.76
Decline in prices 8.1 0.60 7.7 0.56 6.8 0.50 6.9 0.49 7.4 0.51
Cost of Housing                    
Prices will increase 87.4 0.65 86.1 0.70 87.9 0.68 88.0 0.65 87.2 0.66
Price increase more than current rate 66.6 1.06 65.0 1.04 68.5 1.02 67.7 0.96 65.6 1.01
Price increase similar to current rate 17.4 0.80 16.9 0.73 16.3 0.78 16.7 0.74 17.2 0.74
Price increase less than current rate 3.4 0.37 4.2 0.42 3.1 0.36 3.6 0.40 4.4 0.39
No changes in prices 9.2 0.54 10.1 0.56 9.4 0.61 9.1 0.55 9.5 0.57
Decline in prices 3.4 0.41 3.8 0.43 2.7 0.34 2.9 0.34 3.3 0.36
Cost of Services                    
Prices will increase 83.6 0.80 78.4 0.86 80.8 0.81 79.5 0.78 80.1 0.78
Price increase more than current rate 60.5 1.14 56.2 1.05 59.2 1.08 58.8 1.03 56.3 1.08
Price increase similar to current rate 18.8 0.83 18.0 0.70 17.6 0.80 16.6 0.72 18.9 0.78
Price increase less than current rate 4.3 0.39 4.2 0.43 4.0 0.40 4.1 0.40 4.9 0.45
No changes in prices 13.0 0.68 17.1 0.74 16.3 0.74 17.0 0.72 16.0 0.71
Decline in prices 3.4 0.44 4.4 0.48 2.9 0.36 3.5 0.37 3.9 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 2: Inflation Expectations of Various Groups: Mar-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 0.09 8.1 0.13 9.6 0.09 9.0 0.16 9.5 0.10 9.8 0.19
Gender-wise                        
Male 8.9 0.13 8.1 0.18 9.6 0.13 9.1 0.25 9.5 0.15 9.6 0.28
Female 8.7 0.12 8.1 0.16 9.7 0.13 9.1 0.25 9.5 0.15 10.0 0.20
Category-wise                        
Financial Sector Employees 8.7 0.43 7.2 0.43 9.2 0.43 8.4 0.51 9.5 0.45 8.5 0.30
Other Employees 8.7 0.17 8.1 0.21 9.4 0.17 8.9 0.22 9.5 0.21 9.9 0.27
Self Employed 8.9 0.19 8.2 0.25 9.5 0.20 9.0 0.32 9.5 0.24 9.6 0.42
Homemakers 8.7 0.14 8.2 0.17 9.7 0.15 9.3 0.28 9.6 0.17 10.1 0.14
Retired Persons 9.6 0.32 9.1 0.70 10.2 0.31 10.1 0.33 9.5 0.44 9.6 0.63
Daily Workers 8.6 0.24 7.8 0.28 9.3 0.27 8.9 0.50 8.6 0.37 9.0 0.50
Other category 8.2 0.19 7.6 0.20 9.2 0.20 8.4 0.19 9.1 0.25 8.9 0.32
Age Group-wise                        
Up to 25 years 8.0 0.16 7.2 0.18 8.9 0.17 8.1 0.17 8.9 0.21 8.7 0.21
25 to 30 years 8.5 0.18 8.0 0.24 9.2 0.19 8.9 0.27 9.4 0.23 9.7 0.34
30 to 35 years 8.9 0.19 8.2 0.25 9.7 0.20 9.2 0.35 9.8 0.26 10.2 0.18
35 to 40 years 9.0 0.20 8.5 0.23 9.9 0.21 9.8 0.30 9.8 0.24 10.1 0.27
40 to 45 years 9.0 0.22 8.4 0.28 9.9 0.22 9.4 0.36 9.7 0.27 10.0 0.28
45 to 50 years 9.1 0.23 8.9 0.43 9.9 0.25 10.0 0.30 9.5 0.29 10.0 0.33
50 to 55 years 8.4 0.26 7.7 0.39 9.3 0.27 8.5 0.38 8.8 0.34 9.3 0.58
55 to 60 years 9.4 0.33 9.2 0.60 10.2 0.33 9.9 0.50 9.9 0.41 10.0 0.54
60 years and above 9.1 0.24 8.6 0.43 10.0 0.27 10.0 0.35 9.1 0.35 9.5 0.47
City-wise                        
Ahmedabad 7.5 0.30 6.9 0.34 8.6 0.36 7.8 0.39 8.2 0.43 8.1 0.50
Bengaluru 6.9 0.22 5.7 0.12 8.4 0.23 7.6 0.34 9.2 0.24 8.8 0.39
Bhopal 8.9 0.82 8.0 1.28 9.7 0.75 9.6 0.85 8.8 0.59 8.5 1.10
Bhubaneswar 8.8 0.64 7.9 1.32 10.3 0.67 9.6 1.30 10.0 0.81 10.4 1.02
Chennai 10.6 0.40 10.4 0.33 11.7 0.40 12.0 1.27 12.0 0.48 14.3 1.51
Delhi 9.3 0.21 9.2 0.49 10.1 0.22 10.1 0.20 10.2 0.27 10.4 0.17
Guwahati 7.6 0.42 6.7 0.56 7.9 0.48 7.3 0.67 8.3 0.61 7.6 1.09
Hyderabad 8.7 0.36 8.0 0.40 9.4 0.32 8.9 0.38 9.1 0.43 9.9 0.45
Jaipur 7.9 0.39 7.4 0.49 8.1 0.38 7.6 0.37 6.6 0.59 6.3 0.85
Jammu 12.3 0.73 13.4 2.10 11.9 0.64 13.3 1.81 11.4 0.87 14.6 1.71
Kolkata 10.0 0.25 9.6 0.50 10.8 0.24 10.3 0.28 10.8 0.27 10.7 0.36
Lucknow 8.6 0.58 7.7 0.77 9.0 0.53 8.0 0.75 9.0 0.60 8.4 0.74
Mumbai 8.4 0.22 7.6 0.25 9.1 0.22 8.4 0.27 8.2 0.25 8.6 0.34
Nagpur 8.5 0.47 8.0 0.66 9.8 0.50 9.3 0.66 9.6 0.68 10.4 0.47
Patna 7.4 0.44 7.3 0.62 8.1 0.47 8.2 0.55 8.0 0.53 8.4 0.50
Thiruvananthapuram 7.2 0.59 6.0 0.73 9.1 0.63 8.3 1.06 10.5 0.59 9.7 1.14
Chandigarh 10.5 0.60 9.8 0.37 10.3 0.61 10.0 0.46 10.3 0.65 10.1 0.54
Ranchi 8.9 0.33 8.3 0.29 9.2 0.34 8.8 0.35 9.1 0.66 9.6 0.69
Raipur 9.9 0.51 10.0 0.51 10.4 0.55 10.4 0.53 9.3 0.76 10.3 0.80
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
Mar-23 9.5 0.10 8.9 0.17 10.5 0.10 10.2 0.08 10.4 0.11 10.5 0.07
Sep-23 9.0 0.09 8.4 0.11 9.7 0.09 9.1 0.17 9.3 0.11 9.9 0.17
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
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
Mar-23 67.4 68.8 60.9 65.9 68.0
Sep-23 62.0 64.3 60.7 63.2 66.3
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
One Year Ahead
Mar-23 75.7 75.7 69.6 74.9 75.7
Sep-23 69.8 71.2 66.8 72.2 71.5
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
 
Table 5(a): Cross-tabulation of Number of Respondents by Current Inflation Perception and Three Months Ahead Inflation Expectations: Mar-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 14 2 0 0 1 3 0 0 0 0 0 0 0 0 0 0 1 0 21
1-<2 5 32 21 4 2 1 0 0 0 0 0 0 0 0 0 0 0 0 65
2-<3 1 10 111 78 43 15 2 0 0 0 1 0 0 0 0 0 0 0 261
3-<4 0 4 10 113 64 53 9 1 1 1 4 1 0 0 0 0 0 0 261
4-<5 0 0 8 13 118 73 46 16 8 2 2 0 0 0 0 0 0 0 286
5-<6 2 4 22 31 29 495 152 205 79 16 106 0 0 0 0 5 0 0 1146
6-<7 0 2 3 8 5 17 190 98 68 19 16 2 2 0 1 0 0 0 431
7-<8 0 1 2 3 5 20 9 241 120 59 49 5 5 0 1 0 0 0 520
8-<9 0 2 0 1 3 9 12 5 192 88 173 9 16 2 1 2 5 0 520
9-<10 0 0 3 0 0 1 1 4 6 96 82 17 20 4 2 5 0 0 241
10-<11 0 1 1 2 3 42 5 10 17 15 450 64 184 57 10 236 72 1 1170
11-<12 0 0 1 0 0 0 0 0 0 2 2 12 5 4 1 0 1 0 28
12-<13 0 1 0 0 0 0 0 1 0 0 1 2 36 8 15 23 7 0 94
13-<14 0 0 0 0 0 0 0 0 0 0 1 0 0 5 1 2 2 0 11
14-<15 0 0 0 0 0 0 1 0 0 0 1 1 0 0 6 0 5 0 14
15-<16 0 0 0 0 0 5 0 0 3 0 12 0 3 2 0 76 124 0 225
>=16 0 0 2 0 0 7 0 1 1 1 23 1 4 0 0 26 720 3 789
Total 22 59 184 253 273 741 427 582 495 299 923 114 275 82 38 375 937 4 6083
 
Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: Mar-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 11 1 3 1 1 3 0 0 0 0 1 0 0 0 0 0 0 0 21
1-<2 22 13 17 5 3 4 0 1 0 0 0 0 0 0 0 0 0 0 65
2-<3 45 4 39 60 56 37 10 3 2 0 4 0 0 0 1 0 0 0 261
3-<4 35 3 6 51 50 64 20 14 9 1 4 1 1 0 1 0 1 0 261
4-<5 48 0 1 5 52 52 52 30 22 5 16 1 1 0 0 1 0 0 286
5-<6 162 1 10 9 20 247 119 159 129 43 197 6 8 3 0 24 8 1 1146
6-<7 71 0 2 0 3 6 86 73 90 29 44 9 6 2 1 6 3 0 431
7-<8 69 1 0 1 2 9 4 120 90 65 104 15 21 0 5 12 2 0 520
8-<9 58 0 0 1 2 2 4 6 100 62 150 35 61 6 5 19 9 0 520
9-<10 21 0 0 0 0 0 2 2 5 59 44 38 36 5 8 13 8 0 241
10-<11 112 0 0 1 1 16 1 4 11 5 241 48 144 51 29 291 213 2 1170
11-<12 7 0 0 0 0 0 0 0 1 0 0 4 5 3 3 3 2 0 28
12-<13 10 0 1 0 0 0 0 0 1 0 3 0 18 7 16 25 13 0 94
13-<14 2 0 0 0 0 0 0 0 0 0 0 0 0 3 1 1 4 0 11
14-<15 0 0 0 0 0 0 0 0 0 0 1 1 0 0 4 3 5 0 14
15-<16 20 0 0 0 0 0 0 0 0 1 3 0 1 1 0 48 151 0 225
>=16 74 0 0 0 0 6 0 0 1 0 12 0 2 0 1 12 677 4 789
Total 767 23 79 134 190 446 298 412 461 270 824 158 304 81 75 458 1096 7 6083

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 February 08, 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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