Household gross financial savings as percentage of GDP lowest in 25 years
The falling trend in financial savings is not good news for an economy with a current account deficit and requiring an investment kick to growth
In 2014-15, gross financial savings fell to a mere 9.8% of gross domestic product (GDP), the lowest level in 25 years, points out a note by Nirmal Bang Institutional Equities economist Nikhil Gupta. The math is simple. According to Reserve Bank of India (RBI) data, the gross change in financial assets of the household sector amounted to ₹ 12,35,622 crore, while the Central Statistics Office’s preliminary estimates at current prices of GDP for 2014-15 is ₹ 125,41,208 crore. The change in household gross financial assets works out to 9.85% of nominal GDP.