By Anup Roy | Updated on Oct 07, 2026 at 02:21 PM
Indian households expect inflation to rise sharply over the next three months and one year, reflecting concerns over price pressures that prompted the central bank to increase the benchmark rate for the first time in nearly four years.
Households’ perception of current inflation increased by 60 basis points in the survey conducted from Sept. 10 to 20 over the previous round in July, according to a bi-monthly survey by the Reserve Bank of India released Wednesday. The outlook rose by 70 basis points for the next three months, and 60 basis points for the year ahead.
The survey, which covered 5,987 respondents across 19 major cities, is an indicator of the expected direction of change rather than the absolute level of inflation.
Households’ assessment aligns with that of the RBI, which raised its repo rate by 25 basis points to 5.50%, citing growing inflation risks. Governor Sanjay Malhotra pointed to early signs of a pickup in core inflation and higher prices across a broader segment of the consumption basket.
Expectations of a rate increase had strengthened after consumer inflation accelerated to 4.82% in August, moving closer to the upper end of the central bank’s 2%-6% tolerance band.
Still, a higher rate is not expected to significantly dampen consumption, the economy’s key growth engine, according to the RBI.
“Consumer optimism for the year ahead remained in positive terrain, albeit with slight moderation,” the RBI said in its urban consumer confidence survey . The sentiment is optimistic on income and spending, with some concerns over the economic situation, employment and prices, it said.
Rural sentiment fell slightly but was still in the optimistic zone, the RBI said.