Is India’s Consumer Confidence On The Rise? RBI’s Surprising Findings For July 2025!

The Reserve Bank of India (RBI) on Thursday released the results of its July 2025 round of the Urban Consumer Confidence Survey (UCCS), which showed a marginal improvement in the sentiment of urban households.

According to the bi-monthly survey conducted between July 1-12 across 19 major cities, covering 5,592 respondents, the Current Situation Index (CSI) rose to 96.5 in July from 95.4 in May, marking a 1.1-point increase.

Improved consumer outlook despite inflation concerns

The improvement was attributed to better consumer perceptions on income, spending, and general economic conditions, despite persisting concerns on employment and price levels.
The Future Expectations Index (FEI), which captures consumer outlook for the next one year, also edged up by 1.3 points to 124.7 from 123.4 in the previous round, reflecting sustained optimism about the economic outlook, income growth, and future spending.

Notably, pessimism surrounding the current price situation and inflation eased for the third straight survey round. The net response on price levels improved to -87.0 in July from -88.5 in May.

While the net perception regarding current income improved to 2.1 (from 0.4 in May), expectations of future income remained broadly stable, with the net response rising marginally from 52.3 to 52.6.

Steady income growth, strong spending confidence

This indicates that while more households feel their incomes have improved recently, their expectations for the future remain steady.

On employment front, the current sentiment dipped with the net response falling to -6.7 in July from -5.9 in May.

However, forward-looking optimism persisted as expectations for employment in the next one year saw an uptick in the net response to 31.0 from 29.8 earlier.

Spending trends continued to reflect strong consumer confidence. The net response for current spending improved to 78.0, while expectations for future spending rose to 80.0.

This was supported by gains in non-essential spending, which registered a rare positive net sentiment of 0.4, a notable shift from -3.4 in May, and future expectations on this front climbed to 15.0 from 13.8.

Essential spending remained consistently high with a net response of 86.5 for current perception and 86.2 for future expectations.

The RBI reiterated that the views expressed in the survey are those of the respondents and may not necessarily reflect the central bank’s own stance. (Inputs from ANI)

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