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Indian households have perceived and expected a decline in inflation levels, according to the Reserve Bank of India's July 2025 round of its bi-monthly Inflation Expectations Survey of Households (IESH).
The survey, conducted between July 1-12 across 19 major cities, covering 5,197 valid responses, indicates a broad-based easing of inflationary concerns. The median perception of current inflation dropped by 50 basis points to 7.2 per cent in July from 7.7 per cent in May 2025. Inflation expectations for the next three months and one year ahead also fell by 60 and 50 basis points, respectively, to 8.3 per cent and 9.0 per cent. For the three-month horizon, 79.5 per cent of households expect prices to increase, down from 80.5 per cent in May. For the one-year horizon, the number stood at 88.1 per cent, compared to 89.2 per cent in the previous round of survey done in May 2025. However, the share of respondents expecting food prices to rise dropped in the new survey to 80 per cent from 82.8 per cent in May. City-wise variations were stark. For example, Bhopal recorded the highest one-year ahead inflation expectation at 11.2 per cent, while Ahmedabad households saw the lowest at 5.4 per cent. Delhi respondents pegged current inflation at 8.1 per cent and anticipated it to increase up to 9.0 per cent a year ahead. Retired persons and older respondents continued to have the highest inflation perception and expectations, with the 60+ age group projecting inflation to rise to 9.6 per cent in one year. In contrast, daily workers reported the lowest median expectation at 8.1 per cent. The Central Bank however clarified that the survey provides directional insight into near term inflationary pressure, RBI does not necessarily endorse these views "it provides directional information on near-term inflationary pressures as expected by respondents and may reflect their own consumption patterns. Hence, survey results reflect respondents' views, which are not necessarily shared by the Reserve Bank" noted RBI. (ANI)
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