Consumer demand revival may take one more year despite moderating inflation

RBI's MPC said going forward, the inflation trajectory would be guided by food dynamics

It seems consumption demand may take at least a year to revive.

For instance, while Fitch Ratings has upped India's growth forecast by 30 basis points for 2023-24, it projected consumer spending growth to decline to 2.3 per cent during the year from 7.5 per cent in the previous year and 5.2 per cent average during 2018-2022.

This was despite the consumer price index (CPI)-based inflation projected to fall to five per cent by the end of the current calendar year from 5.7 per cent at the end of the previous year and 5.2 per cent on average during 2018-22.