India | Why the jump in household savings won’t be permanent
Indian households have hoarded savings through the Covid crisis, although to a lesser extent than the rest of the world. Emerging from the pandemic, the damage wreaked on the economy raises the possibility that households could turn more precautionary permanently. But our analysis suggests otherwise.
What you will learn from this report:
- We forecast the household savings rate will fall substantially in 2022, but to remain slightly above 2019 levels.
- The anticipated slowdown in income growth over 2019-2030 will likely push the household savings rate back towards its pre-pandemic level of 24%-25% in the next two to three years.
- We expect lower reliance on foreign savings, which could be a positive for domestic savings in India.
Tags:
Related Services
Post
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.
Find Out More
Post
China: Emerging green shoots in Spring, but not out of the woods
We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).
Find Out More