Households expect inflation pressures to ease; consumer confidence rises

Pessimism about employment conditions dips

Households expect prices to come down in two time horizons — in the near term and one year ahead — while consumer confidence has strengthened sentiment, according to the Reserve Bank of India’s (RBI’s) forward-looking surveys in March 2025.

 

Households’ median inflation perception declined 50 basis points from the previous survey round (January 2025) to 7.8 per cent, marking its lowest level since the pandemic.

 

Inflation expectations for three months moderated by 40 basis points to 8.9 per cent and for one-year ahead by 50 basis points to 9.7 per cent.

 

The respondents expect prices of most product groups, especially food products and housing, to come down in both the time horizons, according to the results of the March 2025 round of its Bimonthly Inflation Survey of Households (IESH).

 

The survey was conducted during March 1-10 in 19 major cities, with 6,091 valid responses.

 

Referring to consumer confidence, the survey has shown for the current period it has strengthened, driven by broadbased improvements across all survey parameters.

 

The current situation index (CSI) rose 1.8 points to 95.5 in March 2025.

 

The households’ outlook for the year ahead remained optimistic, with the future expectations index (FEI) rising by 1.7 points to 122.4 in the latest survey round (March 2025).

 

Pessimism on employment eased in March 2025 while optimism about job prospects remained strong. Pessimism among respondents has reduced about both current prices and those a year ahead compared to the previous survey round (January 2025).

 

Households’ perception of income improved, returning to optimistic territory after four rounds of pessimistic net response. Income expectations remained upbeat, the survey showed. 

Optimistic outlook

  Pessimism on employment eased in March 2025, while optimism about job prospects remained strong

  Three-month inflation expectations eased to 8.9%, one-year outlook to 9.7%

  Households foresee lower inflation, particularly for food and housing, across time horizons

  Consumer confidence strengthened, with Current Situation Index (CSI) rising to 95.5

  Future Expectations Index (FEI) remained optimistic, increasing to 122.4 in March 2025