The Expected Inflation
CCI survey collects data on consumers’ expectation of price level. In the third quarter of 2017, the expectation of “increase in price level” in next 6 months has dominated (44.8 percent), while 27.2 percent of consumers expect no change in price level in next 6 months. However, 19.5 percent of consumers “do not know about changes in inflation”. The expected rate of inflation is estimated to be 2.4 and 3.1 percent in the next 6 months and the next year, respectively.
Figure 1. The expected inflation rate, in next 6 months and the next year
The responses “expects an increase in price level” and “no change in it” in the next year are the highest (46.7 and 28.8 respectively). During the last two surveys, the response “do not know about a change in inflation in the next year” has been considerably high and it may be related to increased uncertainty.
In Ulaanbaatar, the expected inflation rates (2.4 percent in next 6 month, 3.22 percent in the next year) are the same as that in rural areas (2.35 percent in next 6 months, 3 percent in the next year). In other words, the expectation in price level is similar across urban and rural areas.