Inflation Expectations Survey of Households December 2015

By | February 3, 2016
(Last Updated On: February 3, 2016)

Source RBI

Date : Feb 03, 2016

The Inflation Expectations Survey of Households for December – 2015 (42nd round) captures the inflation expectations of 4,828 urban households across 16 cities, for the next three month period 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:

  1. In terms of qualitative response, the proportion of respondents expecting price rise by ‘more than current rate’ for prices in general as well as prices in all product groups (except cost of services) have decreased marginally as compared with previous round of survey for both three-month ahead period and one-year ahead period (Table 2). However, proportion of respondents expecting price rise by ‘similar to current rate’ for prices in general as well as prices in all product groups have increased as compared with previous round of survey for both three-month ahead period and one-year ahead period.
  2. In terms of quantitative responses, common respondents’ expect similar level of inflation as their current inflation perceptions, for three-month ahead period based on their own consumption and buying experiences (Chart 1).
  1. The survey shows that self-employed, retired persons and daily workers have comparatively higher inflation expectations for three month ahead period based on median inflation rates. Respondents from Guwahati, Ahmedabad, Chennai, Jaipur and Bhubaneswar expect relatively higher inflation for next three months.

Table 1: Respondents’ Profile (Category): Share in Total Sample
Category of RespondentsShare in Total (%)Target Share (%)
Financial Sector Employees10.410.0
Other Employees15.415.0
Self-employed20.020.0
Housewives29.530.0
Retired Persons9.510.0
Daily Workers9.710.0
Others5.55.0
Note: The above sample proportion is for the round ended December, 2015 survey

 

Table 2: Product-wise Expectations of Prices for Three-month ahead and One-year ahead
(Percentage of respondents)
Round No./survey period38394041423839404142
(Round ended) →Dec-14Mar-15Jun-15Sep-15Dec-15Dec-14Mar-15Jun-15Sep-15Dec-15
Options: GeneralThree month AheadOne year Ahead
Prices will increase72.473.681.081.185.479.882.290.989.090.0
Price increase more than current rate25.728.334.432.131.532.132.941.738.836.2
Price increase similar to current rate27.024.024.322.131.329.928.828.824.830.0
Price increase less than current rate19.821.222.326.922.617.820.620.425.423.8
No change in prices16.515.413.912.89.811.210.05.85.85.9
Decline in price11.011.15.26.14.89.07.83.35.24.0
Options: Food ProductThree month AheadOne year Ahead
Prices will increase72.374.483.182.084.679.982.491.987.689.8
Price increase more than current rate25.227.935.133.731.530.732.039.138.236.8
Price increase similar to current rate28.525.225.724.231.730.529.230.525.330.4
Price increase less than current rate18.521.322.324.121.418.721.122.324.022.6
No change in prices17.115.011.711.29.311.39.95.26.65.9
Decline in price10.610.65.36.96.08.97.73.05.84.3
Options: Non-Food ProductThree month AheadOne year Ahead
Prices will increase65.164.276.071.372.775.176.085.680.480.7
Price increase more than current rate21.221.727.724.721.926.125.831.729.026.1
Price increase similar to current rate26.124.026.322.729.230.628.430.323.629.8
Price increase less than current rate17.818.521.923.921.718.421.723.627.724.8
No change in prices25.624.620.622.421.816.616.311.213.815.0
Decline in price9.311.23.46.35.58.37.73.15.84.4
Options: Household DurablesThree month AheadOne year Ahead
Prices will increase59.768.269.163.367.972.177.682.275.577.0
Price increase more than current rate20.425.425.922.120.627.529.231.828.626.1
Price increase similar to current rate23.824.424.218.926.927.829.228.722.129.2
Price increase less than current rate15.618.419.022.320.416.819.221.724.821.6
No change in prices27.321.623.526.322.616.515.512.715.915.2
Decline in price13.010.27.410.59.511.46.95.28.67.8
Options: Housing PricesThree month AheadOne year Ahead
Prices will increase78.483.281.477.879.686.190.390.187.387.7
Price increase more than current rate39.546.743.138.738.647.953.150.348.745.4
Price increase similar to current rate24.921.523.720.826.125.623.024.319.425.8
Price increase less than current rate13.914.914.518.314.912.614.215.519.216.5
No change in prices13.711.813.814.913.26.65.46.57.07.0
Decline in price7.95.04.87.37.27.34.43.45.85.3
Options: Cost of ServicesThree month AheadOne year Ahead
Prices will increase71.678.579.972.080.281.886.989.784.989.8
Price increase more than current rate28.432.734.228.433.234.737.639.536.938.1
Price increase similar to current rate26.625.726.720.728.330.029.529.722.129.8
Price increase less than current rate16.620.019.122.918.817.219.920.525.821.9
No change in prices21.717.918.023.416.311.69.78.210.67.2
Decline in price6.73.62.14.73.56.63.32.14.53.0

 

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 endedFoodNon-FoodHouseholds durablesHousingCost of services
Three-month Ahead
38Dec-1462.051.948.548.349.5
39Mar-1568.857.343.343.147.5
40Jun-1567.851.347.248.452.2
41Sep-1570.058.950.853.055.9
42Dec-1572.658.651.152.859.1
One-year Ahead
38Dec-1466.857.853.553.356.6
39Mar-1570.561.851.552.055.8
40Jun-1570.262.258.559.862.8
41Sep-1569.560.454.759.060.0
42Dec-1576.863.258.860.265.8

 

Table 4: Household Inflation Expectations -Current, Three-Month Ahead and One-year Ahead
Survey RoundSurvey period EndedInflation rate in Per cent
CurrentThree-month AheadOne-year Ahead
MeanMedianStd. Dev.MeanMedianStd. Dev.MeanMedianStd. Dev.
38Dec-149.08.84.28.88.34.59.38.94.6
39Mar-159.19.04.09.08.54.39.69.14.5
40Jun-1510.09.54.110.110.14.510.810.34.4
41Sep-1510.69.94.410.710.54.511.110.84.6
42Dec-1511.010.34.210.910.34.111.210.54.3

 

Table 5: Factors that Explain the Total Variability
Round No.Survey period endedCurrentThree-month AheadOne-year Ahead
38Dec-14City, CategoryCity, CategoryCity, Category
39Mar-15CityCityCity
40Jun-15City, Category, Age-GroupCity, Category, Age-GroupCity, Category, Gender
41Sep-15City, Age-GroupCity, Age-GroupCity, Age-Group, Gender
42Dec-15City, Age-GroupCity, Category, Age-GroupCity, Age-Group
Note: Results based on exercise using Analysis of Variance.

 

Table 6 : Various Group-wise Inflation Expectations for December 2015 Survey Round
CurrentThree-month AheadOne-year Ahead
MeanMedianStd. Dev.MeanMedianStd. Dev.MeanMedianStd. Dev.
Gender-wise
Male10.910.44.210.810.34.211.010.44.3
Female11.110.34.210.910.24.111.410.64.3
Financial Sector Employees10.810.04.210.59.74.211.110.24.3
Other Employees11.110.44.210.810.24.211.210.44.2
Self Employed11.210.64.211.110.64.211.310.74.3
Housewives10.910.24.210.910.24.111.110.44.4
Retired Persons11.310.54.211.110.64.211.511.04.4
Daily Workers11.210.54.111.110.64.111.410.94.2
Other category10.19.73.910.09.53.910.39.64.2
Up to 25 years10.29.74.010.29.73.910.49.74.1
25 to 30 years10.910.34.110.910.34.211.210.54.3
30 to 35 years10.910.24.210.910.24.211.210.54.3
35 to 40 years10.910.34.310.710.14.311.010.34.3
40 to 45 years11.310.64.311.210.64.211.610.84.4
45 to 50 years11.710.74.211.310.64.211.711.14.4
50 to 55 years11.410.94.111.010.63.911.511.24.2
55 to 60 years11.510.94.211.210.94.211.210.94.5
60 years and above11.711.14.311.511.04.211.911.54.4
Ahmadabad13.815.83.614.216.23.614.416.33.6
Bangalore9.99.73.68.39.02.99.69.43.7
Bhopal6.75.92.96.66.03.06.55.82.9
Bhubaneswar11.811.64.112.713.33.713.316.14.0
Chennai14.816.33.112.916.04.314.916.33.1
Delhi7.56.33.28.57.63.47.76.63.7
Guwahati14.916.33.314.516.33.615.416.32.7
Hyderabad9.29.12.89.29.32.610.09.63.0
Jaipur12.712.93.413.013.93.413.114.13.5
Kolhapur11.510.82.911.510.73.210.610.03.4
Kolkata11.910.83.812.011.84.211.810.54.0
Lucknow11.310.94.311.311.54.510.810.14.4
Mumbai11.110.63.211.210.63.211.210.73.4
Nagpur7.06.42.47.47.22.37.16.82.2
Patna9.59.41.810.210.01.810.210.01.7
Thiruvananthapuram11.812.54.810.010.54.511.611.94.9
All11.010.34.210.910.34.111.210.54.3

 

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)
<11-22-33-44-55-66-77-88-99-1010-1111-1212-1313-1414-1515-16>=16No ideaTotal
<15000000000000100208
1-22220000000000000017
2-3461121101010000000027
3-40010178230220000000145
4-50017224530451351100102014196
5-60010184812488922928940023012467
6-70001035456247471961001213279
7-80001143839846257106111123320
8-90007213123469722510315513262
9-10000331311475420854702384333629605
10-110002522611264320763632022182930567
11-1200001115830316517231251013222
12-1300000021410366281516731129
13-140000001133187811349371
14-1500004214414251391047265510224
15-1600025223183228117544711195
>=16000314116713616121961550861751204
Total118508718530427935032756751424918010717617810571994828

 

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)
<11-22-33-44-55-66-77-88-99-1010-1111-1212-1313-1414-1515-16>=16No ideaTotal
<15000000000000000308
1-20410100000000000017
2-3021490000000000000227
3-40061813000000000000845
4-50051652642100000000254196
5-600111857126199300000000152467
6-7000533446010800000000623279
7-80011112240801331002000425320
8-9010057102845127632001522262
9-1000014853644199171110015678605
10-11000034427466417716111024334567
11-120000003310211657560003521222
12-13000000144241310282501514129
13-14000000011957125809571
14-15000000014246441947128221224
15-16000001000213129622485518195
>=160000000131467351991038991204
Total57386817927632429329050440326210781967413444774828

1 The previous round of the survey data was published on September 29, 2015 on RBI website. The survey results are based on views of the respondents which are not necessarily shared by the Reserve Bank of India.

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