Urban Optimism Soars: RBI Survey Shows Sharp Rise in Consumer Confidence in July 2025

The Reserve Bank of India (RBI) in a survey noted that consumer confidence in urban, semi-urban, and rural areas improved in July, highlighting positive sentiment about general economic conditions, the employment scenario, income, and the overall price situation.

Consumer Confidence Rises

The central bank's July consumer confidence survey for urban areas observed that marginal improvement,  with the Current Situation Index (CSI) rising to 96.5 in July 2025 from 95.4 in May 2025.

For the one-year-ahead period, confidence in the urban region remained in optimistic territory and the Future Expectations Index (FEI) rose to 124.7 in July from 123.4 in May 2025.

Additionally, on the current price level, pessimism and inflation eased sequentially over the past three rounds. There has also been a decline in both price levels and inflationary pressures over the coming year in urban households.

While households were more optimistic about their current earning situation, the outlook for future earnings remained similar to the previous round, according to the survey.

Considering the current trends in semi-urban and rural areas, another RBI survey noted improvement in consumer confidence for the present period.

The CSI inched up to 100.6 in July from 100 in May 2025. FEI also continued its upward trend over the last six rounds, rising to 127.7 in July from 126.2 in May 2025.

Additionally, the share of rural households which are expecting a decline in prices and inflation for the year ahead rose in the July survey round and the current inflation perception among rural households declined from 6.3% in May 2025 to 5.8% in July 2025, while year-ahead inflation expectations also declined from 8.9% in May to 7.9% in July.

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