| Make foodmate.com your Homepage | Wap | Archiver
Advanced Top
Search Promotion
Search Promotion
Post New Products
Post New Products
Business Center
Business Center
Current Position:Home » Documents » Food Industry Reports »

India: Food & Drink Report 2012

  • Published: 2012-12-04
  • File Format: PDF
  • Views: 95   
  • Size: 815.29K
  • Language: English
  • Download Times: 257
enter the download page
India: Food & Drink Report 2012

Consumers Feeling The Squeeze From Tighter Credit And Dogged Inflation
We are maintaining our downbeat outlook on domestic demand in the near term on the back of a tight credit environment and declining asset prices. While inflation has been a dominant theme across the consumer-facing scenes in 2011, the recent moderation in price pressures means that this is unlikely to pose a major threat to near-term private consumption activity. As the accompanying chart illustrates, wholesale price inflation in India has declined from 7.5% in December 2011 to 6.6% in January 2012, providing some reprieve to consumer purchasing power.

Declining Asset Prices To Place Pressure On Domestic Demand
However, we remained concerned about the lagged impact of India’s aggressive hiking cycle over 2011 as well as lower purchasing power as a result of falling asset prices. Declining asset prices will continue to place a dampener on private consumption activity. The benchmark Bombay Stock Exchange India Sensitive Index has been on a sustained downtrend since peaking in November 2010, having fallen 25.1% to current levels. More recently, the drop in the value of the rupee (which has weakened by 19.7% since its July peak) has led to a significant deterioration of household purchasing power.

Already, the Indian consumer is beginning to feel the pinch of an aggressive hiking cycle by the central bank, with discretionary consumer spending coming under greater pressure amid tighter credit conditions. As consumers often have to take out loans to finance their purchases of big-ticket items such as household appliances and automobiles, higher borrowing costs have inevitably weighed on discretionary consumer demand. Passenger car sales growth decelerated sharply over the latter half of 2011 and remained in negative territory between July and October, bearing out the impact of tighter credit on discretionary consumer spending (see chart). Although passenger car sales growth has ticked up in recent months, it remains to be seen whether this positive growth momentum will persists through the coming months, and we will continue to monitor this closely to better ascertain the domestic demand environment in India.

[ Documents search ]  [ ]  [ Notify friends ]  [ Print ]  [ Close ]

0 in all [view all]  Related Comments
more..Related Documents
Featured Documents
Top download this topics
Popular download
Powered by Global FoodMate
Message Center(0)