Households’ Inflation Expectations Survey: What India’s Families Are Feeling About Prices
When it comes to inflation, data isn’t just about charts and percentages — it’s about what people feel when they step into their local markets, buy groceries, or pay rent. The Reserve Bank of India’s latest Households’ Inflation Expectations Survey (IESH) gives a window into these lived experiences, translating daily price anxieties into measurable insights.
What Is the Households’ Inflation Expectations Survey?
The Households’ Inflation Expectations Survey is conducted by the Reserve Bank of India every two months across major Indian cities. It collects views from urban households on how they perceive current price movements and what they expect in the near future — both three months and one year ahead.
For the September 2025 round, the RBI gathered 6,082 responses from 19 cities between August 28 and September 6. This large sample makes it one of the key tools the central bank uses to understand how inflation expectations are evolving among ordinary citizens — something that can influence consumption, savings, and even investment behavior.
Key Takeaways from the September 2025 Round
The results this time tell a cautiously optimistic story.
- Perceived inflation: Households reported that their perception of current inflation rose slightly to 7.4%, up by 20 basis points from the previous survey.
- Future expectations: Interestingly, despite the small rise in current perception, inflation expectations declined — households expect inflation to ease to 8.1% over the next three months and 8.7% over the next year, both lower than the July 2025 readings.
- Fewer people expect sharp price rises: The share of respondents anticipating a rise in prices has fallen across most product groups, including food, housing, and services.
Simply put, people still feel the pinch of prices, but many believe things may slowly improve in the coming months.
Why Inflation Expectations Matter
Inflation isn’t just about what’s happening today — it’s about what people think will happen next. If households expect higher prices in the future, they might spend more now, pushing actual inflation higher. On the other hand, if expectations moderate, it helps the central bank maintain price stability.
That’s why the Households’ Inflation Expectations Survey is so crucial. It captures the psychological side of inflation — the gap between hard data and household sentiment.
Where Households Are Seeing Relief
According to the survey, the easing of expectations was broad-based:
- Food prices: Fewer respondents expect food costs to rise faster than before.
- Non-food items: Expectations of price increases have also softened.
- Housing and services: Even in these high-impact categories, households sense that inflationary pressures are easing.
While the cost of essentials remains high, the outlook is shifting toward cautious optimism.
Different Cities, Different Stories
The survey also highlights how inflation feels very different depending on where you live.
For instance, households in Kolkata and Mumbai reported higher perceived inflation — above 10% in some cases — while cities like Bengaluru and Ahmedabad showed much lower readings around 5–6%.
This variation reflects how local factors — such as supply chains, rent markets, and consumption patterns — shape inflation sentiment across India.
A Broader Economic Context
India’s overall retail inflation has been moderating through the latter half of 2025, helped by easing food prices and strong supply-side management. The RBI’s own monetary stance has been focused on maintaining price stability while supporting growth.
The latest Households’ Inflation Expectations Survey aligns with this trend — people are beginning to feel that inflation, while still high, might be on a downward path.
The Human Side of Inflation
If you ask any homemaker, small business owner, or daily wage worker, they’ll tell you that inflation isn’t just a number — it’s the difference between comfort and compromise. This is what makes surveys like the Households’ Inflation Expectations Survey valuable: they bring the economy closer to human reality.
When inflation expectations ease, it doesn’t just help economists forecast better — it gives ordinary families a little more confidence that tomorrow’s bills might not rise as fast as yesterday’s.
In Conclusion
The September 2025 Households’ Inflation Expectations Survey paints a picture of gradual stabilization. While people still feel the heat of higher prices, the overall sentiment points toward improvement in the months ahead.
For policymakers, that’s a good sign. For households, it’s a small but meaningful reason to breathe a bit easier.
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Frequently Asked Questions (FAQs)
1. What is the Households’ Inflation Expectations Survey?
The Households’ Inflation Expectations Survey is conducted by the Reserve Bank of India every two months. It collects feedback from households across major Indian cities on how they perceive current inflation and what they expect for the next three months and one year. The findings help policymakers understand how inflation feels at the ground level and how public expectations might influence future price trends.
2. Why is the Households’ Inflation Expectations Survey important?
Inflation isn’t just about statistics; it’s about what people expect to happen next. If households think prices will rise, they might spend more now, which can add pressure to actual inflation. This survey helps the RBI gauge those expectations and take informed policy decisions to keep inflation stable while supporting economic growth
3. What did the latest Households’ Inflation Expectations Survey reveal?
According to the September 2025 survey, households reported a small increase in perceived current inflation (7.4%) but expect prices to ease over time. Expectations for the next three months fell to 8.1%, and for the next year to 8.7%. This indicates that people believe inflationary pressures may gradually soften in the coming months.