Why Households Expect Inflation to Stay High: Global Survey Reveals Persistent Fears

Household Inflation Expectations Far Exceed Forecasts, Says BIS

In its latest quarterly report, the Bank for International Settlements (BIS) unveiled surprising results from a newly developed international household survey: people across the globe expect inflation to remain significantly higher than current rates — and much higher than what economists project.

The survey, conducted in March and April 2025, gathered data from 31 countries, including 13 advanced economies and 18 emerging markets. The results showed a striking global pattern: households consistently report inflation expectations that exceed both actual inflation and professional forecasts.

In advanced economies, households expected inflation to be about double that of economists’ predictions. The gap was even wider in emerging markets.

The BIS suggests that these elevated expectations are linked to recent high inflation episodes. Households perceive post-pandemic price increases to be more dramatic than they actually are — and tend to overestimate the loss of real wages. These perceptions are having a long-lasting psychological effect, lifting inflation expectations even as prices begin to stabilize.

Interestingly, while most households don’t blame central banks for the inflation surge — instead pointing fingers at supply chain shocks and rising commodity prices — they also show limited understanding of what central banks actually do.

With more people relying on social media for financial information, the BIS report raises a critical question: Should central banks be more active in public education and online communication?

One silver lining: the survey found that households tend to trust central banks more than their governments and largely support central bank independence. Still, the BIS warns that anchoring inflation expectations will require clearer and broader public engagement.