Research Briefing | Sep 24, 2021

India | Why the jump in household savings won’t be permanent

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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.
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