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India’s household consumption growth to slow down: IIFL

Sustained agri-commodity inflation and unprecedented asset price inflation are some of the factors driving the uptick in household consumption, IIFL said

May 20, 2013 12:40 IST | India Infoline News Service
After four years of robust growth, IIFL (India Infoline) in its report titled India-Economy: Rough Patch said that it expects India’s household consumption growth to decelerate sharply over the next one to two years.

Sustained agri-commodity inflation, unprecedented asset price inflation, acceleration in government expenditure, and a sharp increase in wages due to a tight labour market have been the four key factors driving the uptick in household consumption in the past few years.

IIFL expects these four tailwinds are largely behind us. Furthermore, a few of these tailwinds such as asset price inflation and wage growth will likely turn into headwinds, weighing on consumption.

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