Decoding Consumption Trends - Likely To Dwindle Further In The Coming Months: Motilal Oswal

Motilal Oswal Report

An analysis of 12 rural consumption indicators suggests that rural spending rose 5.3% YoY in nine months-FY23 versus 0.6% YoY growth in 9MFY22. However, consumption grew at a three-quarter low of 4.6% YoY in Q3 FY23 versus 6.5%/5.6% YoY rise in Q1/Q2 FY23.

The slowdown was primarily led by:

1. four-quarter low growth in real agriculture gross value added,

2. continued fall in non-agricultural wages,

3. sharp slowdown (nine-quarter low growth) in two-wheeler sales,

4. continued decline in farmers’ terms of trade (negative for eight quarters now),

5. drop in real farm exports (first decline in 10 quarters) and

6. three-quarter low growth in real farm credit in Q3 FY23.

An analysis of nine urban consumption indicators suggests that the sector grew slowly by 11.5% YoY in 9MFY23, following a 12.4% YoY growth in 9MFY22.

It is estimated to have increased 6.6 % YoY in Q3 FY23 versus 18 %/10.9% YoY rise in Q1/ Q2 FY23. Three among the nine indicators – real non-farm consumer imports, real non-farm GVA and Index of industrial production for consumer durable goods – witnessed a slowdown.

Others such as real salaries of BSE500 employees, domestic passenger vehicle sales, real personal credit and petrol consumption posted higher growth.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.