Demand for goods, services likely to increase in FY10

Domestic demand for goods and services in the country is likely to increase in FY’10 on account of a possible sharp decline in commodity prices globally and reduction in prices of branded goods, an economic think-tank has said.

“We expect a sharp fall in commodity prices globally and the reduction in prices of branded goods following the excise cut in India. This will help augment demand in 2009-10,” the Centre for Monitoring Indian Economy (CMIE) said in its report on the state of the economy here.

Most of the demand-related problems, which the industry faced following the worsening of the global liquidity crisis in September 2008, were temporary in nature, the report said. Besides, the prompt monetary measures taken by the RBI, consequent fall in interest rates and improvement in availability of credit are expected to create a conducive environment for demand to grow, it said.