DOMESTIC HOUSEHOLD SAVINGS
Household debt needs to be kept under watch
"With overall household savings declining to 18.4% of GDP (gross domestic product) in FY23 from an average of 20% of GDP over 2013-2022, and coupled with an increasing trend in financial liabilities, household debt warrants close monitoring from a financial stability perspective," the Reserve Bank of India (RBI) said in its latest Financial Stability Report released on Wednesday.
Reality behind the 8.2% FY24 GDP growth is not as robust
The 8.2% FY24 GDP growth reflects a modest deceleration from 3QFY24 at 8.6%. Real gross value added growth slowed considerably in 4QFY24 to 6.3% from 8.3% in 1QFY24.
Dalal St is likely pricing in a Modi 3.0 but election winners already have a bitter household burden
India's stock market hit an all-time high last week, as investors anticipate a third term for Prime Minister Narendra Modi will boost corporate profits. However, consumer debt poses a significant risk. Slow wage growth, high interest rates, and heavy borrowing have strained spending for over 300 million families. Despite this, investors expect post-election growth in private capital expenditure and infrastructure projects
Why Indians borrowing more and saving less shouldn’t worry you
DK Joshi, Chief Economist at CRISIL, highlights a shift in household savings towards higher return financial assets like mutual funds and stocks. He expresses concern over the higher borrowing growth rate compared to savings growth rate.
Household savings likely revived in FY24: Crisil
Household savings in India likely saw a recovery in FY24, rebounding from a low in FY23, driven by increased deposit growth, investments in markets and real estate, and subdued consumption, according to Crisil. Bank deposits grew 13.5%, mutual fund investments rose, and domestic savings financed rising investments.
10 Best Flour Mill Machines in India for fresh and pure atta
When searching for the best flour mill machine in India, several factors warrant careful consideration to ensure optimal performance and satisfaction. Efficiency stands as a primary concern, as it directly impacts the milling process's speed and effectiveness. A high-efficiency flour mill machine can swiftly grind grains into fine flour, saving both time and effort. Durability is another crucial aspect, as a sturdy and robust construction ensures the machine can withstand the rigors of frequent use without succumbing to wear and tear. So, if you want the flour mill machine scroll down for the list.
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These midcap stocks with ‘strong buy’ & ‘buy’ recos can rally over 20%, according to analysts
The way mid-cap stocks have performed in the last one week. The biggest question would be whether this is another short term profit booking move or a beginning of a long phase correction and valuation adjustment. The answer would depend on one thing, election results. The policy continuity will lead to continued re-rating of the mid-cap segment as operationally the working of mid-cap companies have seen maximum improvement in terms of cost of capital which is the biggest factor for a mid cap companies. During this phase, analysts are bullish on select stocks from different sectors, some of which are either the leaders of their sector or part of the top three companies which are known to be well managed. ET screener powered by Refinitiv’s Stock Report Plus lists down quality stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or "strong buy". This predefined screener is only available to ET Prime users.
Unchecked retail F&O play could trigger challenges for market: FM
Finance minister Nirmala Sitharaman highlighted the importance of investor sentiment and financial stability at the Viksit Bharat 2047 event. She stressed the role of both BSE and NSE in ensuring market stability, leveraging technology for efficiency, and adopting a soft-touch regulatory approach.
India to emerge as third largest consumer market by 2026: Report
The Indian economy is projected to become the world's third-largest consumer market by 2026. In 2023, India experienced faster consumption growth compared to China, the US, and Germany. However, consumption growth has trailed behind investment growth since the mid-2022 post-pandemic period, according to a UBS Securities report.
Expecting FY25 to be better than FY24 for exports: Rakesh Sharma, Bajaj Auto
We expect the markets to be growing at about 7% to 8% in the coming year with the upper half of the industry growing at perhaps 2-3% points more and the bottom half growing at 2-3% points less than the average of 7% to 8%.
China wants everyone to trade in their old cars, fridges to help save its economy
China's trade-in plan for electric vehicles aims to boost growth amid trade tensions. The initiative includes upgrading machinery, fiscal support details pending, and a focus on environmental standards and recycling networks.
Alarm bells ringing in economy, households slowly sinking into debt: Congress slams govt
The report states that this "dramatic" fall in savings is due to weak income growth, which explains why both private consumption and household investment growth have remained markedly subdued in 2023-24, Jairam Ramesh said.
India's improving savings-investment dynamic amid lower deficits
The current account, reflecting the difference between domestic savings and investments, has seen a significant reduction in India since the taper tantrum, falling from 4.8% of GDP in FY13 to an average deficit of 1.1% per annum from FY14 to FY21. This reduction is attributed to a decrease in investment as a percentage of GDP, outweighing the decline in overall domestic savings.
ETMarkets Smart Talk: Why investors should not ignore BFSI & consumption sectors in FY25: Milind Muchhala
Milind Muchhala advises exploring BFSI and consumption sectors amid market correction. He anticipates that in FY25, there wikk be market consolidation with intermittent volatility. He further considers fixed income as an alternative investment and says has been apprehensive of the part of the market where the valuations had gone completely out of whack and the margin of error was minimal.. Key factors include elections, budget and earnings trajectory for investors.
Domestic household savings needs to increase to finance pvt capital formation in economy: Finance Ministry Eco Review
India needs to bolster domestic household savings to support private sector capital formation, as per the Finance Ministry's Monthly Economic Review. The report anticipates a better current account balance in the ongoing fiscal year due to a reduced merchandise trade deficit and increased net services receipts. However, concerns persist regarding the current account deficit in FY25.
Can China maintain growth and 'transform' its economy at the same time?
China has been here before: in 2013, President Xi Jinping unveiled a slate of bold economic and social reform plans in a 60-point agenda that painted a long-term picture of free markets and consumption-driven growth.
India's household savings can potentially rise by 2.7% by 2030
India's ability to raise growth rates depends on self-financing investment and increasing household savings. Barclays suggests measures like increasing the domestic savings pool, accessing financial markets, and promoting investment, labour force utilization, and export growth.
Charting the global economy: Germany reels from manufacturing downturn
Germany's struggling economy faces geopolitical tensions, declining manufacturing, and a fragile recovery.
Japan's economy slips into recession, raises BOJ policy uncertainty
Japan's economy slipped into recession on weak domestic demand, raising uncertainty about the central bank's plans. Japan lost its title as the world's third-largest economy. BOJ may sharply downgrade GDP forecasts. Takuji Aida expects further contraction. Reuters poll suggests April for ending negative rates. Marcel Thieliant predicts sluggish growth at BOJ's upcoming meeting in March.
View: Post-Covid recovery of poor households exceeds expectations. But many still need a leg-up
The recovery was aided by benefits received through welfare schemes of both state and central governments, which helped bolster support for those households that lost their earnings due to the pandemic. However, financial inclusion at the bottom of the pyramid needs to be enhanced to ensure they are not overwhelmed by informal debt.
Households in recession while the economy booms
The surge in household liability, rising by 76% largely going into purchases of houses and automobiles was seen as a sign of rising prosperity.
Mentoring the non-savers: Why we need to offer financial guidance to domestic helpers, small-service providers
Non-savers, who have no savings or surplus left after meeting essential expenses to run their households, need mentoring and handholding to be able to find better jobs and incomes. Non-savers, who don’t have the education, health or resilience to strengthen their finances, need access to better markets and funding, subsidies and care..
Congress cites RBI data to question govt's economy management
Congress leader Jairam Ramesh said RBI's October bulletin, compared to the previous one, showed the continuing or worsening of a range of negative indicators, including a 47-year low in the savings growth rate, a stagnation of domestic credit to the private sector, and a flat labour-force participation rate.
Post-pandemic spends dragged household savings in FY23, rate climbing up now: RBI
The household savings rate in India has hit a five-decade low in 2022-23, according to the Reserve Bank of India. Deputy Governor Michael Patra explained that the decline is due to increased spending after pandemic-related restrictions were lifted, as well as an increase in liabilities, particularly in the form of home loans. Patra noted that historically, the average household savings rate was about 7.5%, but during the pandemic, it had increased due to factors such as inability to spend and precautionary savings.
How falling household savings affect the economy
With government expenditure needs exceeding the revenues, the savings were negative. Government dissaving has averaged 2.1% of GDP in the past 10 years. Households contribute to most of the gross savings, contributing over 65% in 2021-22.
Falling household savings a risk to India’s world-beating growth
Indian households' net financial savings have decreased, posing a threat to the government's capital investments. This decline in savings limits resources for the rest of the economy and could require the government to rely on volatile foreign capital. Rising debt levels and stagnant income contribute to this trend, potentially indicating rising inequality.
GST an engine for driving consumption, helped households save on monthly bills: Govt
The Goods and Services Tax (GST) has helped drive domestic consumption and save households money since its implementation in India six years ago, according to the government. The number of registered taxpayers has also increased significantly since its introduction. Under the GST, a four-rate structure is applied to different types of goods, with a top rate of 28%.
China, its economy flagging, prods consumers to save less and spend more
Six commercial banks all announced that they had lowered the rate for demand deposits, essentially a checking account, to 0.2% from 0.25%. The banks cut the interest rates on deposits covering a fixed period of time. The Industrial and Commercial Bank of China, the country’s biggest lender by assets, cut the five-year deposit rate to 2.5% from 2.65% and lowered the three-year rate to 2.45% from 2.6%, according to the bank’s website.
Savings-deposits star as evergreen pair
Fixed deposits, traditionally favoured by Indians to park their extra money, could make a strong comeback because banks are tapping into a lending boom after Covid restrictions on a large part of economic activity. Market borrowings are both costly and riskier for banks, and the competition to raise deposits will intensify as corporate investment reinforces consumer credit demand.
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