Urban Confidence Rises: RBI's Latest Survey Signals Economic Optimism

The Reserve Bank of India (RBI) unveiled its July 2025 Urban Consumer Confidence Survey results on Thursday, indicating a minor boost in urban household sentiment. Conducted across 19 major cities, involving 5,592 respondents from July 1-12, the survey's Current Situation Index (CSI) climbed to 96.5 from May's 95.4, marking a 1.1-point gain.

This uplift is credited to improved consumer perceptions about income, spending, and the broader economy, despite ongoing worries over employment and price levels. The Future Expectations Index (FEI), which gauges consumer sentiment for the year ahead, increased by 1.3 points to 124.7, signaling continued confidence in economic prospects and income growth.

A noteworthy shift was observed as consumer pessimism about prices and inflation eased for the third consecutive survey. The net response on price levels improved to -87.0 in July from -88.5 in May. Current income net perception rose to 2.1 from 0.4 in May, though future income expectations saw a minor rise from 52.3 to 52.6.

While more households report recent income improvements, their future expectations remain stable. The employment sentiment dropped slightly with a net response of -6.7 in July from May's -5.9. However, future employment optimism rose, with expectations increasing to 31.0 from 29.8.

Spending trends showed strong consumer confidence. Net current spending responses improved to 78.0, while future spending expectations rose to 80.0, supported by increased non-essential spending sentiment, which moved to 0.4 from -3.4 in May, and future expectations increased to 15.0 from 13.8. Essential spending remained robust, with net responses of 86.5 for current and 86.2 for future expectations.

The RBI highlighted that the survey reflects respondents' views, not necessarily the central bank's stance.

(With inputs from agencies.)