Indian Consumers Are Cautious About Spending Again
January 27, 2021
India, one of the hardest-hit nations during the pandemic, has seen case numbers plunge and lifted most restrictions, but consumers are still in crisis mode, according to a recent report from the Wall Street Journal.
With more than 10 million confirmed cases, India had the second-highest number of infections in the world, and its economy, which saw a 15% GDP contraction in the six months through September, was one of the worst-performing major economies.
Like in most other nations, the crisis caused Indian consumers to save more. India’s household savings rate surged to 21.4% of GDP in June, up from 7.9% a year prior, according to a report from Inda’s central bank. The U.S. saw a similar surge when the savings rate climbed from 7% to 30% in April. It remains elevated but has since fallen to less than 15%. India has not yet seen a similar decline.
Additionally, the Wall Street Journal notes that mobility data from Google shows that retail and recreational activity remains around 27% below pre-pandemic levels, despite a big drop in the nation’s case numbers. This indicates that even as numbers fall and restrictions lift, Indian consumers remain fearful, and the economy may not rebound in earnest until widespread vaccination can be achieved, which, considering the nation’s population, may not be for some time.