Consumer confidence up marginally, inflation seen easing ahead: RBI survey

RBI surveys indicate consumer confidence improved in September 2025 in both urban and rural areas, with inflation expectations softening and manufacturers retaining optimism

Consumer confidence improved marginally among Indians in September in urban and rural areas over July on improved sentiments, according to the Reserve Bank of India’s (RBI’s) forward-looking surveys.

 

The survey showed the Current Situation Index (CSI) for urban areas rose by 0.4 points to 96.9 in September, and for rural regions, it advanced further into the optimistic zone from 100.6 in July to 100.9 in September.

 

Looking a year ahead, urban consumers’ confidence will remain in the optimistic territory. The Future Expectations Index (FEI) rose by 0.3 points to 125 in September. Households in the urban areas expect a decline in both price and inflationary pressures in the coming year, although pessimism about the current price level and inflation inched up marginally.

 

 

For rural consumers, FEI improved within the optimistic zone. The share of rural households’ long-term inflation expectations over a one-year horizon has declined in the current round of the survey.

 

The Households’ Inflation Expectations Survey showed that the perception of the current median inflation inched up by 20 basis points (bps) to 7.4 per cent compared to the previous round.

 

According to the Industrial Outlook Survey for Q2FY26, manufacturers indicated some moderation in demand conditions compared to the previous quarter. However, they retained a positive outlook on demand conditions for the October-December quarter (Q3FY26), albeit with some signs of moderation.

 

The cost pressures from raw materials and salary outgo are expected to ease, while growth in selling prices may be higher. The Business Expectations Index remained steady for the third quarter, reflecting sustained sentiment among manufacturers.

 

Manufacturers anticipate improved demand conditions in the Q4FY26 and Q1FY27. The input cost pressures are likely to persist. They also expect pricing power to pass on higher costs through selling prices.