General prices increase expectiation higher in next 3 months than in previous 2 rounds – RBI Survey

General prices increase expectiation higher in the next 3 months than in previous two rounds-Households Inflation Expectations Survey of RBI

Today, the Reserve Bank has released the June 2017 round of the Inflation Expectations Survey of Households (IESH) conducted in 18 cities. The results are based on responses from 4,737 urban households covering various occupational categories.

Households’ Inflation Expectations Survey of RBI

Highlights:

1. The proportion of respondents expecting general prices to increase in the next three months was slightly higher than in the previous two rounds and this was reflected across product groups, barring food products.
2. Around half of the respondents who expected the general price level to increase in the next three months also felt that prices would rise by more than the current rate; this proportion has also increased marginally over the May 2017 round of the survey.

1. The rise in inflation expectations was reflected across all product groups, except housing.

2. While a higher proportion of respondents expected the general prices to increase over the year ahead, the proportion of respondents who expected the general prices to rise at more than current rate (i.e., implying higher inflation) was lower than in the May 2017 round.

3. Three months ahead and one year ahead median inflation expectations are stable since the March 2017 round ; however, as compared with the June 2016 round, they declined by 170 and 100 basis points, respectively, in the June 2017 round,