RBI Forward-Looking Surveys Synthesis: Sharp Drop in Inflation Expectations Coincides with Rising Growth
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure
Reserve Bank of India (RBI) | National Statistics Office (NSO)
The November 2025 round of the Reserve Bank of India’s forward-looking surveys—covering households (IESH), urban and rural consumers (UCCS/RCCS), and professional forecasters (SPF)—reveals a sharp shift in outlook toward stabilizing prices and robust economic growth.
Key Forward-Looking Signals (November 2025 Round):
Inflation Expectations (Households): Households anticipate a significant softening of median inflation pressures across the board:
Current Perception: Declined sharply by 80 basis points (bps) to 6.6% (IESH).
Short-Term Expectation: Three-month ahead expectation softened by 50 bps to 7.6%.
Long-Term Expectation: One-year ahead expectation softened by 70 bps to 8.0% (IESH) and dramatically dropped to 6.1% for rural consumers (RCCS).
Growth Forecasts (Professional Forecasters - SPF): Following the release of Q2:2025-26 GDP estimates, professional consensus strongly favored higher growth:
Real GDP growth forecast for 2025-26 was raised to a median of 7.5%.
The forecast for the following year, 2026-27, remains strong at 6.6%.
Headline CPI Inflation is forecasted at a low 2.1% for 2025-26 and 4.0% for 2026-27.
Consumer Confidence and Spending: Consumer sentiment remains highly optimistic about the future:
The Future Expectations Index (FEI) for both urban and rural consumers showed further improvement, rising to 125.6 (Urban) and 128.6 (Rural), both remaining well above the neutral line.
Current spending sentiment moderated due to easing prices, but future spending plans, particularly on non-essential items, showed an increase in optimism.
The Future Expectations Index (FEI) is a key component of the Consumer Confidence Surveys (Urban and Rural). It is compiled based on the net responses (optimism minus pessimism) of households regarding their expectations for the general economic situation, employment, prices, income, and spending one year ahead. A value above 100 indicates overall optimism.
Policy Relevance
The synchronized softening of inflation expectations across all household groups (IESH, UCCS, RCCS) and the simultaneous upward revision of GDP growth by professional forecasters (SPF) signals a clear policy window for prioritization of growth. This combination of high consumer optimism, especially concerning future non-essential spending, and contained long-term inflation forecasts provides strong support for the RBI to maintain an accommodative or neutral monetary stance, focusing entirely on maximizing the sustained economic expansion.
Follow the full news here: RBI Household Inflation Expectations Survey
RBI Urban Consumer Confidence Survey
RBI Rural Consumer Confidence Survey
RBI Survey of Professional Forecasters