IHS Markit forecasts that India’s consumption expenditure will double from $1.6 trillion in 2020 to $3.2 trillion by 2030
The data analytics firm said as lockdown conditions have been progressively eased, early signs of recovery are already evident
NEW DELHI: The medium-term economic outlook for India remains favourable supported by a host of key growth drivers despite a projected dip in gross domestic product in FY21 due to the coronavirus induced recession, IHS Markit said on Thursday.
“An important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending. Total Indian consumer spending is forecast to grow by 42% between 2020 and 2025, measured in dollar terms at constant prices," the data analytics firm said in a statement.
IHS Markit forecasts that India’s consumption expenditure will double from $1.6 trillion in 2020 to $3.2 trillion by 2030, measured in constant prices, boosted by strong average annual GDP growth and rapidly rising per capita incomes for India’s fast-growing middle-class urban households.
“By 2030, 1.1 billion Indians will have internet access, more than doubling from the estimated 500 million internet users in 2020. The rapid growth of e-commerce and the shift to 4G and 5G smartphone technology will boost home-grown unicorns like online e-commerce platform Snapdeal, logistics startup Delhivery and the fast-growing online grocer BigBasket, whose e-sales have surged during the pandemic," said Rajiv Biswas, Asia Pacific Chief Economist at IHS Markit.
The impact of the covid-19 pandemic in India has resulted in severe disruptions to industrial production and consumption spending during April and May. IHS Markit has projected GDP to contract by 6.3% in FY21 as the severe negative impact is expected to result in significant contraction in GDP in the June quarter.
However, the data analytics firm said as lockdown conditions have been progressively eased, early signs of recovery are already evident in the most recent economic data. The IHS Markit Purchasing Managers’ surveys for India showed that economic momentum improved in June, reflecting the easing of covid-19 related restrictions during May and June.
“IHS Markit forecast that the Indian economy will rebound as the impact of the pandemic recedes, with improving economic growth momentum in the second half of 2020 and positive GDP growth of 6.7% in the FY22," Biswas said.