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RBI Governor Shaktikanta Das has expressed confidence in the Indian economy saying that private consumption, especially urban demand has been quite healthy. Talking at the Annual FIBAC 2022 Conference, confluence of factors and circumstances is reverberating speedily across countries and jurisdictions. In an unsettling global environment, the Indian economy has been growing steadily, drawing strength from its macroeconomic fundamentals and buffers. According to the IMF, India is slated to be one of the fastest growing major economies of the world in the current year as well as in the next year. Our recovery and growth have been more broad-based. As per the high frequency indicators (HFIs) for the recent months, private consumption – especially urban demand – has remained healthy. The contact-intensive services have continued to make smart rebound, aided by unfettered resumption of activities and full-fledged celebration of festivals after two and half years. External demand, however, remains a weak spot in the face of accentuating global economic slowdown. Domestic Inflation remains elevated and the central bank is closely monitoring the inflation trends as well as the effect of our past actions. In RBI's view, price stability, sustained growth and financial stability need not be mutually exclusive.
India's Gold Demand Up 17% In September Quarter Says WGC
The World Gold Council or WGC stated in a latest update that a 17% y-o-y increase in Indian jewellery demand – to 146t – was led by strong demand in the South in third quarter of 2022. The overall Q3 demand was 12% above its five-year quarterly average (131t) and took y-t-d demand to 381t, 10% higher than last year and almost equivalent to 2019 pre-COVID levels. Urban India consumers have driven the recovery in gold jewellery demand, as economic activity in these areas has normalised. Credit expansion has added impetus to this demand, with bank loan growth touching a nine-year high by quarter-end. The WGC said that it is positive in its outlook for the rest of the year, as festival and wedding demand should be supportive. But demand is not expected to match last year's record-breaking fourth quarter, particularly given that higher inflation relative to urban India may crimp demand in the important rural segment.
Luxury goods market in good shape
India's luxury goods market is expected to grow by 42 per cent to $8.5 billion this year, up from $6bn in 2021, according to Euromonitor International. The number of ultra-high net worth individuals in India is forecast to increase 39 per cent between 2021 and 2026, with 19,006 people projected to have net assets of $30m or more by 2026, according to Knight Frank. Meanwhile, the number of individuals with more than $1m is expected to surge by 77 per cent over the five-year period. India is expected to overtake China next year to become the world's most populous country with 1.4 billion people, according to the UN.
Outlook:
The recent cooling off in the metal prices is likely to augur well for the consumer durable manufactures globally. Meanwhile, despite rising raw material costs and global inflationary pressures, demand from local consumers has led to a rapid V-shaped recovery with double-digit growth in the warehousing sector. The first three quarters of this calendar year saw an all-time high net absorption of 28 million sqft of warehousing space.
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