Pandemic-induced consumption slowdown a thing of the past: Chief Economic Advisor
- Nageswaran stated that while some pockets of consumption growth may not be as robust as others, overall aggregate consumption growth has caught up with long-term trends
NEW DELHI: The economic setbacks caused by the pandemic and subsequent lockdown measures no longer burden household spending, according to V Anantha Nageswaran, Chief Economic Adivsor in the finance ministry. Addressing an industry gathering at the Bharat Chamber of Commerce in Kolkata on Saturday, Nageswaran revealed that private consumption has now caught up with the growth trajectory observed prior to the pandemic.
During his speech, Nageswaran emphasized that the third quarter of FY23 witnessed private consumption exceeding the pre-pandemic trend. This remarkable recovery was largely fueled by the release of pent-up demand, indicating renewed confidence among consumers.
“Private consumption has caught up with the pre-pandemic trend. It is almost as though the pandemic did not happen hurting consumption of households. The catchup has been swift. Of course, mainly driven by urban consumption,” Nageswaran said.
The chief economic advisor shed light on the dynamic nature of rural and urban classifications, emphasising that the notion of lagging rural consumption should be viewed in the context of evolving definitions.
“What might have been considered rural sometime in the past is now being classified as urban. So in some sense, this distinction between rural and urban consumption being somewhat different is artificially induced because we reclassify some locations and centres from rural to urban,” Nageswaran said.
Highlighting the broader picture, he added that while certain pockets of consumption may not be growing as robustly as others, it is important to consider the overall aggregate. Consumption growth in the economy has caught up with the long-term trend, indicating that the slowdown induced by the pandemic is now a thing of the past.
Nageswaran also said that the growth momentum has sustained in the first two months of this financial year as well, which he said, augurs well for a respectable 6.5% of growth this fiscal year.
Nageswaran, however, cautioned that while growth prospects appear bright, external factors posed a downside risk.
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Business NewsEconomyPandemic-induced consumption slowdown a thing of the past: Chief Economic Advisor
First Published:10 Jun 2023, 02:58 PM IST
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