Ahmedabad: Conducted by IIM Ahmedabad's Misra Centre for Financial Markets and Economy, the Business Inflation Expectations Survey (BIES) examines the slack in the economy by polling a panel of business leaders about their inflation expectations in the short and medium term.
The findings of the latest BIES revealed that business inflation expectation has increased sharply by 60 basis points to 4.79% in January 2023, from 4.19% reported in December 2022. It also indicates that firms' sales expectations are showing signs of improvement, but profit margin expectations remain muted.
This monthly survey asks questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc. The survey goes straight to businesses - the price setters - rather than to consumers or households, to understand their expectations of the price level changes.
The BIES can give a probabilistic assessment of inflation expectations and thus get a measure of uncertainty. It also provides an indirect assessment of the overall demand condition of the economy.
The results of this Survey can be used to understand the inflation expectations of businesses and complement other macro data required for policy making.
