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Informist, Friday, Jun. 5, 2026

 

NEW DELHI – Indian households' perception of current inflation and expectations for the next three months and one year jumped in May, according to the Reserve Bank of India's inflation expectations survey released Friday. Households' view of inflation is sharply higher than the actual CPI inflation, reflecting expectations of a rise in price pressures from the war in West Asia. 

 

Notably, household inflation expectations jumped even before the retail prices of petrol and diesel were raised for the first time on May 14. The RBI's inflation expectations survey was conducted during May 2-11. Oil marketing companies have raised petrol and diesel prices by nearly INR 8 per litre in May, which are likely to raise inflation expectations even further.

 

Households' median perception of current inflation rose 60 basis points from March to 7.8% in May. Inflation expectations for three-months ahead and one-year ahead jumped 80 bps and 50 bps, respectively, to 9.3% for both periods, the RBI said.

 

India's CPI inflation rose to 3.5% in April and is expected to have risen to around 4% in May. Retail inflation is seen rising in the coming months because of higher energy prices caused by the war in West Asia. The RBI Friday raised its CPI inflation projection for 2026-27 (Apr-Mar) by 50 bps to 5.1%.

 

"At the short-term horizon, the proportion of respondents anticipating higher general prices and inflation inched up; with similar trend observed across the product groups," the RBI said.

 

In another forward-looking survey, the RBI found consumer confidence in urban areas deteriorated in May, with the Current Situation Index easing to 90.7 from 95.7 in March. Urban consumer confidence for the year ahead also fell even as it remained optimistic, the RBI said.

 

"Households' sentiment significantly weakened on spending for both the time horizon. The waning is primarily driven by ebbed sentiment on discretionary expenditure," the central bank said. 

 

Consumer confidence in rural areas also deteriorated further in May, the RBI said. The one-year-ahead outlook worsened in May but remained in optimistic territory, the central bank said.  End

 

Reported by Shubham Rana

Edited by Deepshikha Bhardwaj

 

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