Inflation Expectations Survey of Households December 2015

By | 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 Respondents Share in Total (%) Target Share (%)
Financial Sector Employees 10.4 10.0
Other Employees 15.4 15.0
Self-employed 20.0 20.0
Housewives 29.5 30.0
Retired Persons 9.5 10.0
Daily Workers 9.7 10.0
Others 5.5 5.0
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 period 38 39 40 41 42 38 39 40 41 42
(Round ended) → Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Options: General Three month Ahead One year Ahead
Prices will increase 72.4 73.6 81.0 81.1 85.4 79.8 82.2 90.9 89.0 90.0
Price increase more than current rate 25.7 28.3 34.4 32.1 31.5 32.1 32.9 41.7 38.8 36.2
Price increase similar to current rate 27.0 24.0 24.3 22.1 31.3 29.9 28.8 28.8 24.8 30.0
Price increase less than current rate 19.8 21.2 22.3 26.9 22.6 17.8 20.6 20.4 25.4 23.8
No change in prices 16.5 15.4 13.9 12.8 9.8 11.2 10.0 5.8 5.8 5.9
Decline in price 11.0 11.1 5.2 6.1 4.8 9.0 7.8 3.3 5.2 4.0
Options: Food Product Three month Ahead One year Ahead
Prices will increase 72.3 74.4 83.1 82.0 84.6 79.9 82.4 91.9 87.6 89.8
Price increase more than current rate 25.2 27.9 35.1 33.7 31.5 30.7 32.0 39.1 38.2 36.8
Price increase similar to current rate 28.5 25.2 25.7 24.2 31.7 30.5 29.2 30.5 25.3 30.4
Price increase less than current rate 18.5 21.3 22.3 24.1 21.4 18.7 21.1 22.3 24.0 22.6
No change in prices 17.1 15.0 11.7 11.2 9.3 11.3 9.9 5.2 6.6 5.9
Decline in price 10.6 10.6 5.3 6.9 6.0 8.9 7.7 3.0 5.8 4.3
Options: Non-Food Product Three month Ahead One year Ahead
Prices will increase 65.1 64.2 76.0 71.3 72.7 75.1 76.0 85.6 80.4 80.7
Price increase more than current rate 21.2 21.7 27.7 24.7 21.9 26.1 25.8 31.7 29.0 26.1
Price increase similar to current rate 26.1 24.0 26.3 22.7 29.2 30.6 28.4 30.3 23.6 29.8
Price increase less than current rate 17.8 18.5 21.9 23.9 21.7 18.4 21.7 23.6 27.7 24.8
No change in prices 25.6 24.6 20.6 22.4 21.8 16.6 16.3 11.2 13.8 15.0
Decline in price 9.3 11.2 3.4 6.3 5.5 8.3 7.7 3.1 5.8 4.4
Options: Household Durables Three month Ahead One year Ahead
Prices will increase 59.7 68.2 69.1 63.3 67.9 72.1 77.6 82.2 75.5 77.0
Price increase more than current rate 20.4 25.4 25.9 22.1 20.6 27.5 29.2 31.8 28.6 26.1
Price increase similar to current rate 23.8 24.4 24.2 18.9 26.9 27.8 29.2 28.7 22.1 29.2
Price increase less than current rate 15.6 18.4 19.0 22.3 20.4 16.8 19.2 21.7 24.8 21.6
No change in prices 27.3 21.6 23.5 26.3 22.6 16.5 15.5 12.7 15.9 15.2
Decline in price 13.0 10.2 7.4 10.5 9.5 11.4 6.9 5.2 8.6 7.8
Options: Housing Prices Three month Ahead One year Ahead
Prices will increase 78.4 83.2 81.4 77.8 79.6 86.1 90.3 90.1 87.3 87.7
Price increase more than current rate 39.5 46.7 43.1 38.7 38.6 47.9 53.1 50.3 48.7 45.4
Price increase similar to current rate 24.9 21.5 23.7 20.8 26.1 25.6 23.0 24.3 19.4 25.8
Price increase less than current rate 13.9 14.9 14.5 18.3 14.9 12.6 14.2 15.5 19.2 16.5
No change in prices 13.7 11.8 13.8 14.9 13.2 6.6 5.4 6.5 7.0 7.0
Decline in price 7.9 5.0 4.8 7.3 7.2 7.3 4.4 3.4 5.8 5.3
Options: Cost of Services Three month Ahead One year Ahead
Prices will increase 71.6 78.5 79.9 72.0 80.2 81.8 86.9 89.7 84.9 89.8
Price increase more than current rate 28.4 32.7 34.2 28.4 33.2 34.7 37.6 39.5 36.9 38.1
Price increase similar to current rate 26.6 25.7 26.7 20.7 28.3 30.0 29.5 29.7 22.1 29.8
Price increase less than current rate 16.6 20.0 19.1 22.9 18.8 17.2 19.9 20.5 25.8 21.9
No change in prices 21.7 17.9 18.0 23.4 16.3 11.6 9.7 8.2 10.6 7.2
Decline in price 6.7 3.6 2.1 4.7 3.5 6.6 3.3 2.1 4.5 3.0

 

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 ended Food Non-Food Households durables Housing Cost of services
Three-month Ahead
38 Dec-14 62.0 51.9 48.5 48.3 49.5
39 Mar-15 68.8 57.3 43.3 43.1 47.5
40 Jun-15 67.8 51.3 47.2 48.4 52.2
41 Sep-15 70.0 58.9 50.8 53.0 55.9
42 Dec-15 72.6 58.6 51.1 52.8 59.1
One-year Ahead
38 Dec-14 66.8 57.8 53.5 53.3 56.6
39 Mar-15 70.5 61.8 51.5 52.0 55.8
40 Jun-15 70.2 62.2 58.5 59.8 62.8
41 Sep-15 69.5 60.4 54.7 59.0 60.0
42 Dec-15 76.8 63.2 58.8 60.2 65.8

 

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.
38 Dec-14 9.0 8.8 4.2 8.8 8.3 4.5 9.3 8.9 4.6
39 Mar-15 9.1 9.0 4.0 9.0 8.5 4.3 9.6 9.1 4.5
40 Jun-15 10.0 9.5 4.1 10.1 10.1 4.5 10.8 10.3 4.4
41 Sep-15 10.6 9.9 4.4 10.7 10.5 4.5 11.1 10.8 4.6
42 Dec-15 11.0 10.3 4.2 10.9 10.3 4.1 11.2 10.5 4.3

 

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

 

Table 6 : Various Group-wise Inflation Expectations for December 2015 Survey Round
Current Three-month Ahead One-year Ahead
Mean Median Std. Dev. Mean Median Std. Dev. Mean Median Std. Dev.
Gender-wise
Male 10.9 10.4 4.2 10.8 10.3 4.2 11.0 10.4 4.3
Female 11.1 10.3 4.2 10.9 10.2 4.1 11.4 10.6 4.3
Financial Sector Employees 10.8 10.0 4.2 10.5 9.7 4.2 11.1 10.2 4.3
Other Employees 11.1 10.4 4.2 10.8 10.2 4.2 11.2 10.4 4.2
Self Employed 11.2 10.6 4.2 11.1 10.6 4.2 11.3 10.7 4.3
Housewives 10.9 10.2 4.2 10.9 10.2 4.1 11.1 10.4 4.4
Retired Persons 11.3 10.5 4.2 11.1 10.6 4.2 11.5 11.0 4.4
Daily Workers 11.2 10.5 4.1 11.1 10.6 4.1 11.4 10.9 4.2
Other category 10.1 9.7 3.9 10.0 9.5 3.9 10.3 9.6 4.2
Up to 25 years 10.2 9.7 4.0 10.2 9.7 3.9 10.4 9.7 4.1
25 to 30 years 10.9 10.3 4.1 10.9 10.3 4.2 11.2 10.5 4.3
30 to 35 years 10.9 10.2 4.2 10.9 10.2 4.2 11.2 10.5 4.3
35 to 40 years 10.9 10.3 4.3 10.7 10.1 4.3 11.0 10.3 4.3
40 to 45 years 11.3 10.6 4.3 11.2 10.6 4.2 11.6 10.8 4.4
45 to 50 years 11.7 10.7 4.2 11.3 10.6 4.2 11.7 11.1 4.4
50 to 55 years 11.4 10.9 4.1 11.0 10.6 3.9 11.5 11.2 4.2
55 to 60 years 11.5 10.9 4.2 11.2 10.9 4.2 11.2 10.9 4.5
60 years and above 11.7 11.1 4.3 11.5 11.0 4.2 11.9 11.5 4.4
Ahmadabad 13.8 15.8 3.6 14.2 16.2 3.6 14.4 16.3 3.6
Bangalore 9.9 9.7 3.6 8.3 9.0 2.9 9.6 9.4 3.7
Bhopal 6.7 5.9 2.9 6.6 6.0 3.0 6.5 5.8 2.9
Bhubaneswar 11.8 11.6 4.1 12.7 13.3 3.7 13.3 16.1 4.0
Chennai 14.8 16.3 3.1 12.9 16.0 4.3 14.9 16.3 3.1
Delhi 7.5 6.3 3.2 8.5 7.6 3.4 7.7 6.6 3.7
Guwahati 14.9 16.3 3.3 14.5 16.3 3.6 15.4 16.3 2.7
Hyderabad 9.2 9.1 2.8 9.2 9.3 2.6 10.0 9.6 3.0
Jaipur 12.7 12.9 3.4 13.0 13.9 3.4 13.1 14.1 3.5
Kolhapur 11.5 10.8 2.9 11.5 10.7 3.2 10.6 10.0 3.4
Kolkata 11.9 10.8 3.8 12.0 11.8 4.2 11.8 10.5 4.0
Lucknow 11.3 10.9 4.3 11.3 11.5 4.5 10.8 10.1 4.4
Mumbai 11.1 10.6 3.2 11.2 10.6 3.2 11.2 10.7 3.4
Nagpur 7.0 6.4 2.4 7.4 7.2 2.3 7.1 6.8 2.2
Patna 9.5 9.4 1.8 10.2 10.0 1.8 10.2 10.0 1.7
Thiruvananthapuram 11.8 12.5 4.8 10.0 10.5 4.5 11.6 11.9 4.9
All 11.0 10.3 4.2 10.9 10.3 4.1 11.2 10.5 4.3

 

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)
<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 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 2 0 8
1-2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 7
2-3 4 6 11 2 1 1 0 1 0 1 0 0 0 0 0 0 0 0 27
3-4 0 0 10 17 8 2 3 0 2 2 0 0 0 0 0 0 0 1 45
4-5 0 0 17 22 45 30 45 13 5 11 0 0 1 0 2 0 1 4 196
5-6 0 0 10 18 48 124 88 92 29 28 9 4 0 0 2 3 0 12 467
6-7 0 0 0 10 35 45 62 47 47 19 6 1 0 0 1 2 1 3 279
7-8 0 0 0 1 14 38 39 84 62 57 10 6 1 1 1 1 2 3 320
8-9 0 0 0 7 2 13 12 34 69 72 25 10 3 1 5 5 1 3 262
9-10 0 0 0 3 3 13 11 47 54 208 54 70 23 8 43 3 36 29 605
10-11 0 0 0 2 5 22 6 11 26 43 207 63 63 20 22 18 29 30 567
11-12 0 0 0 0 1 1 1 5 8 30 31 65 17 23 12 5 10 13 222
12-13 0 0 0 0 0 0 2 1 4 10 36 6 28 15 16 7 3 1 129
13-14 0 0 0 0 0 0 1 1 3 3 18 7 8 11 3 4 9 3 71
14-15 0 0 0 0 4 2 1 4 4 14 25 13 9 10 47 26 55 10 224
15-16 0 0 0 2 5 2 2 3 1 8 32 2 8 11 7 54 47 11 195
>=16 0 0 0 3 14 11 6 7 13 61 61 2 19 6 15 50 861 75 1204
Total 11 8 50 87 185 304 279 350 327 567 514 249 180 107 176 178 1057 199 4828

 

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 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 0 8
1-2 0 4 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 7
2-3 0 2 14 9 0 0 0 0 0 0 0 0 0 0 0 0 0 2 27
3-4 0 0 6 18 13 0 0 0 0 0 0 0 0 0 0 0 0 8 45
4-5 0 0 5 16 52 64 2 1 0 0 0 0 0 0 0 0 2 54 196
5-6 0 0 11 18 57 126 199 3 0 0 0 0 0 0 0 0 1 52 467
6-7 0 0 0 5 33 44 60 108 0 0 0 0 0 0 0 0 6 23 279
7-8 0 0 1 1 11 22 40 80 133 1 0 0 2 0 0 0 4 25 320
8-9 0 1 0 0 5 7 10 28 45 127 6 3 2 0 0 1 5 22 262
9-10 0 0 0 1 4 8 5 36 44 199 171 1 1 0 0 1 56 78 605
10-11 0 0 0 0 3 4 4 27 46 64 177 161 1 1 0 2 43 34 567
11-12 0 0 0 0 0 0 3 3 10 21 16 57 56 0 0 0 35 21 222
12-13 0 0 0 0 0 0 1 4 4 24 13 10 28 25 0 1 5 14 129
13-14 0 0 0 0 0 0 0 1 1 9 5 7 1 25 8 0 9 5 71
14-15 0 0 0 0 0 0 0 1 4 24 6 4 4 19 47 12 82 21 224
15-16 0 0 0 0 0 1 0 0 0 21 3 12 9 6 22 48 55 18 195
>=16 0 0 0 0 0 0 0 1 3 14 6 7 3 5 19 9 1038 99 1204
Total 5 7 38 68 179 276 324 293 290 504 403 262 107 81 96 74 1344 477 4828

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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