Inflation Sentiment Eases Among Indian Households, Reveals RBI Survey
A recent survey by the Reserve Bank of India (RBI) has shown a subtle but significant shift in how Indian households perceive inflation. According to the “Inflation Expectations Survey of Households” conducted in May 2025, there is growing optimism among the public, with many feeling that the worst of price pressures may be behind them.
The RBI’s survey, which covered 6,079 respondents across 19 major Indian cities, revealed that the median perception of current inflation fell slightly to 7.7%, a drop of 10 basis points from March’s 7.8%. Looking ahead, inflation expectations over the next three months remained steady at 8.9%, while the one-year-ahead expectation declined to 9.5%, down by 20 basis points.
This softening in outlook suggests that households are beginning to feel some relief, especially in the medium term. Notably, fewer people now expect prices to rise as steeply as before, indicating greater optimism in the overall economic environment. However, concerns still persist. Food inflation remains a key area of worry, with 82.8% of households anticipating a rise in food prices over the next three months. Housing and non-food items follow closely, with 78.3% and 75.3% of households respectively expecting increases in these categories.
Demographic differences are also evident in the findings. Senior citizens and retirees continue to report higher inflation expectations compared to younger groups. Regionally, Jammu, Kolkata, and Mumbai topped the chart with the highest perceived inflation, while Bengaluru and Ahmedabad reported the lowest.
Despite these variations, the overall sentiment appears to be stabilizing. The survey indicated a broad-based easing in inflation expectations across categories such as household durables, housing, and services. While more than half of the respondents still believe food prices will continue to rise, the intensity of concern has declined.
A Note from the RBI
Importantly, the RBI emphasized that this survey is based on personal perceptions and consumption experiences and may not reflect actual inflation statistics or the central bank’s official forecasts. Yet, it provides a valuable glimpse into the mindset of the Indian consumer—a critical factor in understanding future demand and economic sentiment. In summary, while inflation concerns have not disappeared, there is growing confidence among households that inflation may be starting to ease, offering a glimmer of relief for consumers and policymakers alike.
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