Urban Indian households remained pessimistic about their economic situation at present in May 2025, with the Reserve Bank of India’s (RBI) Urban Consumer Confidence Survey, released Friday, showing that Current Situation Index (CSI) for these households inched down to 95.4 from 95.5 in March 2025. Rural households reported a similar decline, with their CSI edging down to 100.0 from 100.1. An index number of less than 100 is indicative of pessimism, while a 100-plus figure suggests optimism. While rural households’ assessment of their current situation has been steadily improving since falling to 96.1 in July 2024, the CSI for urban households has been under 100 for more than six years.
Although the RBI surveys showed that while households are not impressed by their current situation, they are hopeful about the future, with those in both urban and rural areas indicating greater optimism about the year ahead. While urban households’ Future Expectations Index (FEI) increased to a one-year high of 123.4 in May 2025, that of rural households printed at 126.2, the highest in the survey’s short history which dates back to September 2023.
A separate RBI survey on households’ inflation expectations showed that the perception of current inflation eased by by 10 basis points (bps) to 7.7 per cent in May 2025 from March 2025, with their one-year-ahead expectations down 20 bps at 9.5 per cent, according to 6,079 valid responses from 19 major cities. Meanwhile, the Rural Consumer Confidence Survey also measured inflation expectations in rural and semi-urban areas, finding that households’ current perception of inflation was down 30 bps at 6.3 per cent in May 2025, while one-year-ahead expectations declined by 40 bps to 8.9 per cent.