RBI survey: Households optimistic about inflation; Less people expect price hikes

Indian households are beginning to feel that inflation is easing, as fewer people expect prices to rise in the months ahead, the Reserve Bank of India said in its latest survey.The central bank on Friday released the findings of its bi-monthly Inflation Expectations Survey of Households for May 2025, revealing a slight drop in perceived inflation.

The median perception of current inflation fell to 7.7% in May, against the 7.8% recorded in March.

Expectations for inflation over the next three months remained steady at 8.9%, while the one-year-ahead expectation declined by 20 basis points to 9.5%.The survey, conducted between 2 and 11 May across 19 major cities, gathered 6,079 valid responses. It showed that inflation expectations have softened across a broad range of product categories, including food, housing, household goods, and services.Notably, the proportion of households expecting prices to rise in the future has decreased compared to earlier rounds. Still, expectations of inflation remain high, especially for food, with 82.8% of respondents anticipating a price rise in the next three months. Housing at 78.3 % and non-food items at 75.3 per cent followed closely.On a one-year horizon, 89.2% of respondents said they expected prices to go up. While still high, this figure marked a slight moderation from previous levels, suggesting people are growing more optimistic.

The report also revealed differences across age groups and regions. Retired individuals and those over 60 continued to report higher inflation perceptions than younger participants. Regionally, residents of Jammu, Kolkata, and Mumbai perceived the highest levels of inflation, while those in Bengaluru and Ahmedabad felt the least impact.Overall, the numbers point to a gradual shift in sentiment, with households appearing more confident about the price situation in the short and medium term.The apex bank clarified that the survey reflected individual expectations and consumption patterns which may not necessarily align with the official data or RBI’s views.