Consumers expect inflation to continue

A majority of consumers expect the price level to increase in the next three months, while almost all consumers expect the price level to increase over the next year.

This was revealed in the Inflation Expectations Survey (IES) of the second quarter of FY 2022/23, the results of which were announced by the Nepal Rastra Bank here today. In the survey 84.6 percent of the respondents expected the price level to increase in the next three months while 92.3 percent of respondents expected the price level to increase over the next year.

The share of respondents expecting price increases in the next three months as well as the next year has however decreased from mid-Oct, 2022. Nevertheless, the share of respondents expecting price increases in food and its sub-group except for fish, meat, milk, ghee, and oil and hotel and restaurant has increased.

Likewise, the share of respondents expecting price increases in non-food and services and real estate (housing) during the next three months has slightly decreased compared to that of mid-Oct, 2022. Furthermore, the share of respondents expecting price increases one year ahead across the entire food products, except for fish, meat, milk, ghee, oil, drinks, and tobacco, and hotel and restaurant along with non-food and services groups has decreased compared to mid-Oct, 2022.

The IES also showed that the median inflation expectation for three months ahead and one year ahead has remained the same compared to mid-Oct, 2022, and the mean inflation expectation for three months ahead and one year ahead has decreased.

Median inflation expectations for three months and one year ahead stand at 10.0 percent and 12.0 percent respectively. This shows that individuals expect inflation to remain stable in the near term as well as in the medium term, adds the Bank.

The survey was conducted from January 08 to January 14, 2023, among individual respondents from 60 market areas through field interviews. The results are based on responses from 2,010 individuals.

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