Private consumption in India picks up by 12.4 pc as discretionary spend rises
Among major segments, sales of AC and refrigerators posted a strong double-digit number
The report further stated that certain segments of non-durables witnessed improvement in Q1. These include items of daily consumption such as detergent powder, shampoo and instant food, etc. However, some items are trailing behind
A continued momentum in discretionary spending of consumers, coupled with favourable price effect, helped private final consumption expenditure (PFCE) pick up by 12.4 per cent in India in the April-June quarter this fiscal, as against 8.1 per cent in Q1 FY24, a new report has pointed out.
Even in real terms, private consumption has grown by 7.4 per cent, outpacing GDP growth, according to the Bank of Baroda (BoB) report.
“The disaggregated production (IIP) and price (CPI) data showed that demand for durable goods is on a strong footing. This is further supported by moderation in prices,” the report mentioned.
Among major segments, sales of AC and refrigerators posted a strong double-digit number. The quarter also coincided with worsening heat wave conditions and a warmer summer. AC sales picked up by 37.8 per cent in Q1 FY25, compared to -17.5 per cent in the same period of the previous year.
“Other white goods such as TV, mobile phone sales, have also picked up, which generally do not show the seasonal trend in Q1. A softer inflation rate for these items has also contributed to an increasing demand for these items,” the report mentioned. Inflation moderated for all these durable goods items, except AC. Notably, production numbers also got a boost from a favourable low base. The report further stated that certain segments of non-durables witnessed improvement in Q1. These include items of daily consumption such as detergent powder, shampoo and instant food, etc. However, some items are trailing behind.
“This may be due to a shift in consumption behaviour. For example, sales of biscuits and bread have been witnessing a decline for quite a few episodes. This may be on account of consumers moving to healthier bites,” said the report.