Recently updated national account statistics highlights many
interesting and noteworthy trends relating to household economics, especially
consumption, investments and savings at the household level. The data also
highlights the impact of demonetization on the household economics that may be
the key to the understanding of current economic slowdown.
Some of the noteworthy trends in household savings are as
follows:
(a) Overall household
savings have shown a declining tendency in past one decade. From a recent high
of 24.3% of GDP in FY13, these have declined to 22.3% in FY18.
(b) Gross financial savings
have recorded significant increase in the past few years. From 10.7% in FY12,
gross financial savings had increased to 14.2% in FY18. The trend in Net
Financial Savings has been little weak though, reflecting the rise in financial
liabilities at household level, which have risen from 3.3% of GDP in FY12 to
5.6% of GDP in FY18.
This highlights two trends in my view:
(i) The
financial inclusion has gathered pace with expansion of banking and non-banking
financial institutions, especially micro finance lenders. The credit
availability has increased and access to banking has improved financial
savings.
(ii) There
was a sharp fall of 1.5% in gross financial savings in FY17, with matching rise
in physical savings. This appears to be due to demonetization.
(c) Financial liabilities
in proportion to household savings have risen disproportionately post
demonetization. From 14% in FY12, these were in excess of 25% in FY18.
(d) Savings invested in
gold and silver jewelry had mostly remained constant around 0.4% of GDP. It has
seen some decline in FY18 to 0.3%.
 |  | ||
As proportion of gross household savings, deployment in gold & silver jewelry has declined to 1.88% in FY16 to 1.4% in FY18.
Some more interesting trends are seen in the deployment of
financial savings and household consumption patterns.
I shall be discussing these over next couple of days.
No comments:
Post a Comment