Latest news with #FutureExpectationsIndex
Business Standard
3 days ago
- Business
- Business Standard
Urban consumers expect decline in both price and inflationary pressures over coming year
Reserve Bank released the results of July 2025 round of its bi-monthly urban consumer confidence survey (UCCS). The central bank noted that owing to improved sentiments across most of the survey parameters, consumer confidence for the current period improved marginally. The Current Situation Index (CSI) rose by 1.1 points to 96.5 in July 2025. Consumer confidence for the year ahead horizon continued to remain in optimistic territory, indicating robust confidence in outlook. The Future Expectations Index (FEI) also rose by 1.3 points to 124.7 in this survey round. Pessimism on the current price level and inflation eased sequentially in the last three rounds. Households also expect a decline in both price and inflationary pressures over the coming year.
Indian Express
3 days ago
- Business
- Indian Express
Rural, urban consumer confidence on the upswing, but inflation likely to rise in FY27: RBI survey
Consumer confidence in both rural and urban areas saw a positive shift in July, according to the Reserve Bank of India's (RBI) forward-looking surveys. This improvement has been largely driven by a decline in retail inflation and lower interest rates. However, the RBI survey on inflation expectations also flagged a potential rise in retail inflation in the next financial year (2026-27), projecting retail inflation to climb to 4.4 per cent, up from the expected 3.1 per cent for 2025-26. The survey highlighted a modest improvement in rural consumer sentiment for the current period, with the Current Situation Index (CSI) ticking up slightly. This gain reflects better conditions across key indicators such as employment, income, price levels, and overall economic sentiment. Meanwhile, the Future Expectations Index (FEI), which gauges consumer outlook for the year ahead, continued to strengthen, marking its sixth consecutive improvement. These indices — CSI and FEI — are based on household responses to five key parameters: the general economic situation, employment, income, price levels, and spending patterns. The survey also showed that a greater number of rural households now expect inflation and prices to ease in the coming year. This shift in sentiment was supported by a drop in their current perception of inflation, along with a significant decline in expectations for future inflation. A similar trend was observed among urban consumers, whose confidence also saw a slight uptick, driven by more favourable views across most indicators. The urban CSI registered a modest gain, while future expectations remained firmly positive, indicating strong confidence in the economic outlook. The FEI also continued to improve, with the survey noting that concerns about inflation and prices have steadily decreased over the last three rounds. Households now expect price pressures to soften further over the next year. However, while optimism about current earnings has grown, expectations for future income have remained largely unchanged. The RBI's survey on credit conditions shows that banks continue to offer easy lending terms, with most respondents expecting stronger loan demand in the second quarter of 2025-26. This anticipated growth is driven by increased borrowing across sectors such as agriculture, mining, manufacturing, and retail or personal loans. Banks also expect loan terms to ease further, particularly for businesses in the manufacturing and services sectors. Overall, sentiment on loan demand remains upbeat through the fourth quarter of 2025-26, with the current favourable lending conditions likely to persist into the second half of the year. The survey did note, however, that loan demand in the first quarter had seen a seasonal dip across major sectors — a trend consistent with past patterns. According to the RBI's latest data, bank credit growth was at 9.8 per cent as against 14 per cent a year ago. Despite the current easing of inflation, the RBI survey on inflation projects that price pressures are likely to return in 2026-27. Headline inflation, as measured by the Consumer Price Index (CPI), is expected to rise from 3.1 per cent in 2025-26 to 4.4 per cent in the following year. While inflation is expected to remain subdued in the near term, a gradual increase is forecast in the latter part of the year. Core inflation — which excludes food, fuel, and intoxicants — is also expected to stay elevated within a narrow range during the upcoming quarters. These projections are in line with the outlook of the Monetary Policy Committee, which foresees a steady rise in inflation through the end of the fiscal year and into the first quarter of 2026-27. The findings underscore the need for careful monitoring and timely policy responses to manage inflationary risks effectively.
News18
3 days ago
- Business
- News18
RBI survey shows uptick in urban consumer confidence in July 2025
New Delhi [India], August 7 (ANI): 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 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 improvement was attributed to better consumer perceptions on income, spending, and general economic conditions, despite persisting concerns on employment and price 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 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 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 indicates that while more households feel their incomes have improved recently, their expectations for the future remain employment front, the current sentiment dipped with the net response falling to -6.7 in July from -5.9 in 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 trends continued to reflect strong consumer confidence. The net response for current spending improved to 78.0, while expectations for future spending rose to 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 spending remained consistently high with a net response of 86.5 for current perception and 86.2 for future 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. (ANI)
&w=3840&q=100)
Business Standard
4 days ago
- Business
- Business Standard
RBI survey shows consumer confidence rises in rural, urban areas in July
Consumer confidence in urban, semi-urban, and rural areas improved in July, reflecting positive sentiment about general economic conditions, the employment scenario, income, and the overall price situation, according to Reserve Bank of India (RBI) surveys. The RBI's July consumer confidence survey for urban areas showed 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. The Future Expectations Index (FEI) rose to 124.7 in July from 123.4 in May 2025. Pessimism on the current price level and inflation eased sequentially over the past three rounds. Urban households also expect a decline in both price levels and inflationary pressures over the coming year. Although households were more optimistic about their current earning situation, the outlook for future earnings remained similar to the previous round, the survey found. Referring to trends in semi-urban and rural areas, another RBI survey indicated improvement in consumer confidence for the present period. The CSI inched up to 100.6 in July from 100 in May 2025. The FEI continued its upward trend over the past six rounds, rising to 127.7 in July from 126.2 in May 2025. The share of rural households expecting a decline in prices and inflation for the year ahead increased in the July survey round. Current inflation perception among rural households declined from 6.3 per cent in May 2025 to 5.8 per cent in July 2025, while year-ahead inflation expectations fell sharply from 8.9 per cent in May to 7.9 per cent in July.
Mint
25-06-2025
- Business
- Mint
The mystery of India's missing middle class: Is it really part of our growth story?
Next Story Tulsi Jayakumar Enough data points to the inability of this class to lead a consumption boom, a la China's. The consequences of this may be significant. India's economic emergence simply can't afford to leave such an important chunk of the population behind. If India's middle class stays on the margins of its growth story, the economic consequences could be significant. Gift this article India's economy clocked a robust 7.4% year-on-year growth in the fourth quarter of 2024–25 and is forecast to expand around 6.5% in fiscal year 2024-25. While this marks a slowdown from the 9.2% growth achieved in 2023-24, it still makes India one of the world's fastest-growing major economies. India's economy clocked a robust 7.4% year-on-year growth in the fourth quarter of 2024–25 and is forecast to expand around 6.5% in fiscal year 2024-25. While this marks a slowdown from the 9.2% growth achieved in 2023-24, it still makes India one of the world's fastest-growing major economies. Against this backdrop, can one pin hopes on the country's burgeoning middle class to drive a consumption-led growth cycle—one reminiscent of China's transformative economic surge between 2000 and 2010? The research centre PRICE defines a 'middle-class' Indian as someone earning between ₹ 1.09 lakh and ₹ 6.46 lakh per year based on 2020-21 prices, or belonging to a household earning ₹ 5 lakh to ₹ 30 lakh annually. It anticipates this segment expanding from 432 million people in 2020-21 to 715 million by 2030-31 and further to over 1 billion by 2047, forming 61% of India's projected population of 1.66 billion. Yet, beneath the headline numbers, a troubling pattern has emerged: urban discretionary spending remains subdued. The Reserve Bank of India's (RBI) latest Urban Consumer Confidence Survey for May 2025 underscores this caution. The Current Confidence Index, which measures consumer sentiment, stays below the neutral mark at 95.4, having dipped marginally from March. While the Future Expectations Index rose to 123.4, signalling optimism, weak present sentiment continues to weigh on spending. People expect things to improve but hesitate to spend now. Inflation expectations also weigh on consumption. Retail inflation eased to 2.82% in May, prompting a 50-basis-point rate cut by RBI. Yet, price pressures remain intense in essentials such as rent, education, healthcare and personal care. Softening food prices and improved real incomes brought some respite, but high urban living costs constrain discretionary expenditure. A deeper worry lies in the labour market. In May, India's unemployment rate, according to the official Periodic Labour Force Survey (PLFS), rose to 5.6% from 5.1% in April, with joblessness among urban youth aged 15-29 surging to 17.9%. Even amid high growth, job creation has not kept pace. Many new jobs remain informal or gig-based, offering little security or upward mobility. This employment shortfall undermines income security and confidence within the middle class. Private estimates from the Centre for Monitoring Indian Economy (CMIE) paint a stark picture, showing a shrinking labour force and involuntary exits from employment. CMIE places India's labour force participation rate at 40-45%, against the PLFS's 50-55%, a discrepancy explained by differing definitions: CMIE follows the International Labour Organization's income-based criteria, while PLFS includes unpaid or nominally productive work. Either way, a large proportion of people without stable jobs means households are understandably cautious about big-ticket discretionary spending. India's middle-class dilemma becomes sharper when compared with China's experience. Between 2000 and 2010, China's middle class expanded rapidly, fuelled by mass job creation in export manufacturing and sustained wage growth. By 2010, around 40% of its population was middle class. This powered booms in its markets for housing, automobiles, travel and durables. It was backed by policy interventions aimed at affordable housing, employment generation and broad access to credit for asset creation. India, despite rapid urbanization, has not matched this with comparable factory employment or city housing initiatives. Credit, a crucial enabler of middle-class consumption, has expanded but unevenly. Digital lending has surged but remains concentrated in small-ticket but high-cost personal loans for immediate consumption. As flagged by a Fitch Ratings report in January 2025, this rise in unsecured retail lending poses asset quality risks for banks. For middle-class households, a lack of formal job contracts and reliable income documentation limits access to affordable credit for high-expense purchases. If India's middle class stays on the margins of its growth story, the economic consequences could be significant. Domestic demand may stay fragile, increasing reliance on public investment and exports. Inequality risks would deepen if growth benefits just the wealthy, while consumer-facing sectors would grapple with weak demand and stunted expansion potential. A persistently cautious middle class may have social and political ramifications. Rising aspirations without economic security often leads to public frustration and mistrust in institutions. This could make it harder to turn growth into broad-based prosperity. Also Read: Let a middle-class boom fend off a middle-income trap India could take a leaf out of China's story, which recognized early the crucial role of a thriving middle class in sustaining economic development and social stability. Its 14th Five-Year Plan (2021–2025) aims to expand the middle-income group, a goal reinforced by President Xi Jinping at the 2022 Communist Party Congress, where he committed to 'substantially grow" this group. India has all the required building blocks for a consumption-led recovery—but the blueprint is incomplete. Unless we create good jobs, raise real incomes and improve access to housing and affordable credit, the middle class may remain left out of the story. That, in the end, is a problem both for the economy and our social fabric. These are the author's personal views. The author is professor, economics and policy, and executive director, Centre for Family Business & Entrepreneurship at Bhavan's SPJIMR, Mumbai. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
