The Bank for International Settlements published research in the BIS Quarterly Review introducing a new cross-country survey of household economic perceptions and expectations and reporting that households’ 12-month-ahead inflation expectations are consistently above prevailing inflation rates and professional forecasts. The results link elevated expectations to households’ perceptions of the post-pandemic price-level surge, suggesting that even temporary price increases can leave persistent marks on inflation expectations. The survey was conducted in March and April 2025 across 31 economies with around 1,000 broadly representative respondents per country aged 18 to 70, and the article’s main analysis covers 29 jurisdictions, excluding Argentina and Türkiye due to exceptionally high expectations. Households’ expectations were elicited using “lowest”, “highest” and “most likely” inflation rate responses, alongside questions on salient prices (with food and groceries and oil and energy featuring prominently), income, unemployment and interest rates, perceived drivers of the inflation surge and real wage dynamics, and trust and knowledge regarding central banks. The study finds wide dispersion in expectations, with a long right tail and around one in five households expecting inflation above 15% over the next year, and reports that households in advanced economies perceive a roughly 6% post-pandemic real wage loss despite data indicating wages have broadly kept pace with prices. Respondents generally do not attribute the inflation surge to central banks and show majority support for central bank independence, while awareness of central banks and their price stability mandates remains limited and more informed households tend to have lower, more anchored inflation expectations; social media is identified as a major information source, especially in emerging market economies. The module covering household economic expectations is intended to be conducted annually to build comparable time series data, while other parts of the questionnaire are to be adapted periodically to address topical issues.
Bank for International Settlements 2025-09-15
Bank for International Settlements publishes 31-country household survey showing elevated inflation expectations and limited central bank knowledge
The BIS Quarterly Review introduces a survey showing households' 12-month-ahead inflation expectations exceed current rates and professional forecasts, linked to post-pandemic price surges. Conducted in 31 economies, it highlights wide expectation dispersion, with some anticipating inflation above 15% and a 6% real wage loss. The study notes limited awareness of central banks' roles, with social media as a key information source, especially in emerging markets.