Some green shoots are already visible in rural demand, and the healthy monsoon and progress on crop sowing could bolster India’s consumption revival, with an early festive season likely to add to the momentum, Bank of Baroda economists reckoned in a report issued on Wednesday.
The rebound in India’s private consumption spending, which grew at a six-quarter high of 7.4% between April and June, was driven by a strong uptick in demand for durables like air conditioners (ACs) amid a protracted heatwave, as well as other white goods like TVs and mobile phones that generally don’t see any seasonal demand in the first quarter (Q1).
Dipanwita Mazumdar, an economist at the bank, reckoned this could have been because of softer inflation reported in all durable items barring ACs. On fast moving consumer goods (FMCG), Ms. Mazumdar said that production data looks mixed at first sight, but a deeper dive suggests a change in consumer preferences is driving trends rather than weak demand per se.
Among edibles, sales of biscuits, bread have contracted 3% to 5%, but coffee (-8.5%), tea (-13.2%), chocolates (-13.8%), cakes (-17.9%) have seen sharper drops in Q1 over last year, while demand for roasted cashews jumped 43%. Hair oil and hair dye sales dropped a sharp 24% and 70.6%, respectively, and while shampoo sales grew modestly, the demand for medicated shampoos was much higher.
Consumers may be undergoing a change in consumption behaviour spearheaded by healthier quality of living reflected in their food and non-food items’ preferences, Ms. Mazumdar noted.
Published - September 04, 2024 11:57 pm IST
