Urban Consumer Confidence Survey for 2025
The Reserve Bank of India‘s Urban Consumer Confidence Survey (UCCS) for May 2025 indicates a cautious yet improving sentiment among urban households. Conducted from May 2 to 11, the survey gathered insights from 6,090 respondents across 19 major cities. The findings reveal a nuanced picture of current economic perceptions and future expectations.
The Survey
The UCCS is a bi-monthly survey aimed at assessing urban households’ views on economic conditions. It evaluates factors such as income, employment, inflation, and spending behaviour. The survey marks rebranding, separating urban insights from the newly introduced Rural Consumer Confidence Survey.
Key Metrics – CSI and FEI
Two primary indices emerge from the UCCS – – Current Situation Index (CSI) – This index reflects perceptions of the current economic environment. Recently, the CSI slightly declined to 95.4 from 95.5, remaining below the neutral benchmark of 100. – Future Expectations Index (FEI) – This index gauges optimism about future conditions. The FEI increased to 123.4, up from 122.4, indicating heightened expectations for income and employment in the coming year.
Inflation Trends
A notable finding is the reduction in inflation concerns. Urban households reported a decline in perceived current inflation, dropping to 7.7%. Expectations for inflation over the next year also decreased to 9.5%. This trend suggests a shift in consumer perceptions, potentially supporting a demand-side recovery.
Income and Spending Patterns
While current perceptions of income and employment remained stable, optimism about future earnings is robust. Consumers anticipate improved financial conditions, influencing future spending behaviour. Although there has been a slight dip in current expenditure on both essential and non-essential goods, expectations for increased future spending are evident.
Comparison with Rural Sentiment
The newly launched Rural Consumer Confidence Survey provides a comparative context. In April and May 2025, the rural CSI marginally declined to 100.0, yet remains more optimistic than the urban CSI. The rural FEI stood at 126.2, reflecting stronger optimism in rural areas, likely due to favourable monsoon conditions and easing food inflation.
Policy Implications
The findings of the UCCS are vital for economic policy formulation. They suggest that the Reserve Bank of India’s monetary policy may be effectively managing inflation expectations. RBI Governor Sanjay Malhotra brought into light the improvement in urban demand while rural demand remains steady. This puts stress on the importance of sustained efforts in inflation control and employment generation.
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