Jubilee Post News & Views
News Desk
Reserve Bank of India released the results of the May 2020 round of the Inflation Expectations Survey of Households (IESH). In view of the Covid-19 pandemic, the survey was conducted through telephonic interviews between May 5 and 17 in 18 major cities, stated the RBI website.
The results are based on responses from 5,761 urban households. During the entire May month the country was under lockdown due to coronavirus. The IESH survey is conducted at bi-monthly intervals by the RBI to know what Indian household thinks about near future inflation and how much pressure they see.
The survey report stated households’ median inflation perception and expectations increased sharply in May 2020 as compared with the March 2020 round of the survey. Inflation expectation over three-month horizon exceeded that for the next year ahead period in quantitative terms.
Three months and one year ahead median inflation expectations rose by 190 and 120 basis points, respectively, over the previous round. Expecting increasing price pressure on food products, more households expect general prices and inflation to rise over three months horizon as compared to previous round, stated the RBI website.
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However, the prices of all product groups, especially cost of housing, are expected to ease over a year ahead period. The IESH survey is conducted at bi-monthly intervals by the Reserve Bank of India. It provides directional information on near-term inflationary pressures as expected by the respondents and may reflect their own consumption patterns. Hence, they should be treated as households’ sentiments on inflation.
