The RBI's May 2025 survey shows stable urban consumer confidence, with the Consumer Confidence Index at 95.4, slightly down from 95.5. The Future Expectations Index rose to 123.4, reflecting optimism. Inflation concerns are easing, and households expect moderating prices and increased spending, indicating a brighter economic outlook.
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The Reserve Bank of India (RBI) has released its bimonthly Urban Consumer Confidence Survey (UCCS)
The survey captures consumer sentiment based on responses from 6,090 households across 19 major cities.
The survey results are classified into:
Consumer Confidence Index (CCI) => Measures the current sentiment of consumers regarding the general economic situation, employment scenario, price levels, and their own income and spending. A reading below 100 indicates discouragement, while a reading above 100 signals optimism.
Future Expectations Index (FEI): It captures how consumers feel about the prospects for the economy, employment, and their income over a one-year horizon.
Stable but Cautious Present Sentiment => The CCI registered a marginal dip, moving to 95.4 in May from 95.5 in March. Since the index remains below the neutral 100-mark, it shows that consumers, on average, are still pessimistic about the current economic conditions.
Rising Future Optimism => The Future Expectations Index (FEI) shows improvement, rising to 123.4 in May from 122.4 in March. This strong reading, well into the optimistic zone, indicates that urban households are confident about future economic prospects, their future income, and the employment situation.
Easing Inflation Concerns => For the second consecutive survey round, households have reported feeling less pressure from the current price levels. They expect inflationary pressures to moderate over the coming year.
Divergence in Income and Spending
Income => While consumers feel their current income levels have remained largely unchanged, they remain "firmly optimistic" about their earnings growth in the future.
Spending => Households reported a slight dip in their current spending on both essential and non-essential items. However, consistent with their future optimism, they anticipate their overall spending to increase in the year ahead.
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