The March 2017 round of the Inflation Expectations Survey of Households (IESH)¹ was conducted by the Reserve Bank in 18 cities. The results are based on responses received from 5,084 urban households covering various occupational categories (Table 1).

Highlights:

1. A higher proportion of respondents expect the general level of prices to increase in the next three months and over one year ahead as compared with the December 2016 round across all product groups (Table 2).

2. Among the respondents (around 74 per cent) who expect the general level of prices to increase in the next three months, nearly half of them expect prices to rise at more than the current rate across all product groups (Table 2).

3. Across occupation categories, three months ahead and one year ahead median inflation rates moved up by 20 and 50 basis points, respectively, in contrast to the sharp decline observed in the two preceding rounds (Table 4 and Chart 1).

4. Inflation expectations fell sharply in Guwahati and Ranchi, whereas they rose markedly in Raipur and Thiruvananthapuram.

¹ The survey is conducted at regular intervals by the Reserve Bank of India. It provides useful directional information on near-term inflationary pressures and also supplements other economic indicators. However, these expectations are formed by the respondents and may reflect their consumption pattern. Hence, it should not be treated as benchmarks for official measures of inflation.