Fitch Solutions in its latest report has held an optimistic outlook for the Indian consumer over 2021 with real growth in household spending forecast at 9.1 per cent year-on-year. This marks the start of a recovery from the negative 9.3 per cent year-on-year contraction over 2020.
As per the report, the real value of total household spending will remain below pre-Covid-19 levels (2019) with real household spending forecast to reach a total of Rs 73.3 lakh crore in 2021 compared to Rs 74 lakh crore in 2019.
The report further noted that households' disposable income this year will grow to Rs 416,400 and surpass pre-Covid-19 levels of Rs 408,800 which will help support domestic demand. However, inflationary pressures may weigh down on spending which will average at 5 per cent in 2021, outpacing income growth.