Faculty & Research

Business Inflation Expectations Survey (BIES)


The Business Inflation Expectations Survey (BIES) provides ways to examine the amount of slack in the economy by polling a panel of business leaders about their inflation expectations in the short and medium term.

The survey asks questions about year-ahead cost expectations and factors influencing price changes, such as profit, sales levels, etc. The survey is unique in that it goes straight to businesses, the price setters, rather than to consumers or households, to understand their expectations of the price level changes. One major advantage of BIES is that one can get a probabilistic assessment of inflation expectations and thus a measure of uncertainty. It also provides an indirect assessment of overall demand condition of the economy. Results of this will thus be useful in understanding the inflation expectation of business and complement other macro data required for policy making.

Frequently Asked Questions

What is the purpose of the survey?

Inflation expectations are one of the main drivers of current inflation, because expected inflation influences current wage negotiations, price setting, financial contracting for investment and consumption. These are also used to generate inflation forecasts. If economic agents view the central bank as credible, inflation expectations are more likely to be well anchored, further enhancing the effectiveness of monetary policy. Also better anchored inflation expectations lead to lower inflation persistence. Because of this link, central banks can affect current and future inflation by better anchoring agents' expectations of long-term inflation. Therefore, understanding inflation expectations are critical for achieving price stability. But our understanding of inflation expectations is limited. This is partly due to measurement issues as they are not directly observed. That is why Bernanke (2007) called for more emphasis on incorporating learning and imperfect information in the modelling of inflation and of inflation expectations. While understanding inflation expectation of household is important, it is also imperative to capture expectations of firms and business owners. Since business representatives participate directly in setting prices and wages, more insight into the inflation expectations of price setters over different time horizons would be helpful for policy-makers. Availability of this data has enormous potential for research and macroeconomic policy making, particularly for monetary policy. This has gained further importance as the Reserve Bank of India (RBI) has formally moved to inflation targeting. This data will be valuable for firms/companies for setting their own business goals as well.

How is the survey conducted?

Each month, during the second week, panelists receive an e-mail with a secure link to the online survey. The survey is open till the third week of the month.

Who participates in the survey?

Companies are selected based on certain sampling criteria from the list of companies as available with the Ministry of Corporate Affairs (MCA). Approximately 5000 panelists receive the survey each month. Panelists represent businesses from various sectors like manufacturing, wholesale and retail trade, suppliers, transport, construction, etc. The size composition of the panel roughly reflects 39% small, 37% medium and 24% large businesses.

Latest Report

Business Inflation Expectations Survey (BIES)1  – March 2023

A. Inflation expectations

  • One year ahead business inflation expectations, as estimated from the mean of individual probability distribution of unit cost increase, have declined further by 13 basis points to 4.40% in March 2023, from 4.53% reported in February 2023. The trajectory of one year ahead business inflation expectations is presented in Chart 1.
  • The uncertainty of business inflation expectations in March 2023, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has remained same around 2%, as compared to that in February 2023.

Chart 1: One year ahead business inflation expectations (%)

One year ahead business inflation expectations (%)


B. Costs

  • Overall, the cost perceptions data indicates slight moderation of cost pressures. However, the percentage of firms perceiving significant (over 6%) cost increase, has increased from 25% to 31% in this round of the survey.
  • The percentage of firms perceiving over 10% cost increase y-o-y has declined. Over 13% of the firms in March 2023 round of the survey perceive that costs have increased very significantly (over 10%) – further down from 15% recorded in February 2023 (Chart 2).


Chart 2: How do current costs per unit compare with this time last year? – % responses



C. Sales Levels 

  • Firms’ sales expectations have remained subdued. Over 27% of the firms are still reporting ‘much less than normal’ sales in March 2023.
  • The percentage of firms reporting ‘somewhat less than normal’ sales has increased to 30% in March 2023, from 28% reported in February 2023 (Chart 3)2.

Chart 3: Sales Levels - % response



D. Profit Margins

  • The profit margins expectations have remained subdued.
  • Over 34% of the participating firms in March 2023 still perceive profit margins are ‘much less than normal’. In addition, over 37% of the firms perceive profit margins are ‘somewhat less than normal’ – up from 33% reported in February 2023 (Chart 4).


Chart 4: Profit Margins - % response 



Business Inflation Expectation Survey (BIES) – Questionnaire

A. Current Business Conditions

Q1. How do your current PROFIT MARGINS@ compare with "normal"* times?
o    Much less than normal
o    Somewhat less than normal
o    About normal
o    Somewhat greater than normal
o    Much greater than normal

Q2. How do your current sales levels compare with SALES LEVELS@ during what you consider to be "normal"* times?
o    Much less than normal 
o    Somewhat less than normal 
o    About normal 
o    somewhat greater than normal 
o    Much greater than normal 

@ of the main or most important product in terms of sales.
*"normal" means the average level obtained during the corresponding time point of preceding 3 years, excluding the Covid-19 period. 

B. Current Costs Per Unit^
Q3. Looking back, how do your current COSTS PER UNIT^ compare with this time last year? 
o    Down (< -1%)
o    About unchanged (-1% to 1%)
o    Up somewhat (1.1% to 3%)
o    Up moderately (3.1% to 6%)
o    Up significantly (6.1% to 10%)
o    Up very significantly (> 10%)

^ of the main or most important product in terms of sales.

C. Forward Looking Costs Per Unit$
Q4. Projecting ahead, to the best of your ability, please assign a percent likelihood (probability) to the following changes to costs per unit$ over the next 12 months.

Unit costs down (less than -1%)            
  • Unit costs about unchanged (-1% to 1%) 
  • Unit costs up somewhat (1.1% to 3%)
  • Unit costs up moderately (3.1% to 6%)
  • Unit costs up significantly (6.1% to 10%)
  • Unit costs up very significantly (>10%)

$ of the main or most important product in terms of sales.
Values should add up to 100%.


Reports Archival

2023 Results

Summary Data

Consolidated excel file containing all the previous months survey results - Bies - Results.

Take the Survey

In case you are interested in taking the survey, please send an email to bies@iima.ac.in 


In case you have any comments/suggestions for the project, please send an email to bies@iima.ac.in