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Consumer spending to rebound in 2021
Why is it in news?
- According to Fitch Solutions, household spending will return to growth in 2021, expanding by as much as 6.6%.
- The spending was contracted after a COVID-19 pandemic.
Details:
- Consumer spending in India is forecast to have contracted by 12.6% in 2020.
- While growth will return to positive in 2021, we do note the recovery will be slower than most countries.
- Unemployment will remain heightened, while the effectiveness of government support measures is questionable.
- In nominal terms, total household spending will only be 1.2% higher than what it was in 2019 (₹123 lakh crore in 2021, compared to ₹6 lakh crore in 2019).
- Food and non-alcoholic drinks were prioritised in household budgets in 2020.