Households expect easing inflation and improved consumer confidence: RBI

According to the RBI's May survey, households see inflation easing with stable near-term and improving one-year-ahead consumer confidence in both rural and urban areas

Households in India see inflation easing in the one-year-ahead period. Consumer confidence in rural as well as urban areas is expected to remain stable in the near term and improve over the one-year-ahead period, according to Reserve Bank of India surveys conducted in May.

 

Households’ median perception of current inflation declined further by 10 basis points (bps) to 7.7 per cent compared with the March 2025 round of the survey. While inflation expectations for the next three months remained unchanged, the one-year-ahead expectation moderated by 20 bps to 9.5 per cent.

 

The bi-monthly inflation expectations survey of households (IESH) was conducted during 2–11 May 2025 in 19 major cities, with 6,079 valid responses, the RBI said in a statement.

 

The share of respondents anticipating a rise in both general prices and inflation has come down in the current round compared with the previous survey round. Price and inflationary pressures eased across major product groups, including food products and non-food items, it said.

 

Another survey on consumer confidence in urban areas showed that consumer confidence for the year ahead improved further owing to elevated optimism in all survey parameters. Households remain firmly optimistic about future earnings even though their sentiment on current earnings remained around its March 2025 level.

 

Rural consumer confidence for the current period remained at around the same level as the previous survey round. The one-year-ahead outlook, as captured by the Future Expectations Index (FEI), continued to improve within the optimistic zone, the survey showed.