Household savings likely revived in FY24: Crisil
household savings in FY24 after falling to their lowest level in FY23, Crisil said in its report released Tuesday.
“Bank deposits, which constitute the largest chunk of gross financial savings, grew 13.5% in FY2024, compared with 9.6% in the previous year,” it said.
Moreover, Crisil noted that mutual fund investments rose further in FY24, and even a continued rise in equity market returns may have attracted more retail investors.
Net inflows in mutual funds rose to Rs 2 lakh crore in FY24 compared with Rs 1.55 lakh crore in FY23.
“Amid low CAD, increasing domestic savings are likely to have financed rising investments in the economy. We estimate that total domestic savings likely grew stronger in fiscal 2024, compared with 10.7% on-year in the previous fiscal,” the rating agency noted.
India’s current account deficit likely narrowed to around 1% in GDP in FY24.
Crisil further pointed out that other high-frequency data also indicated a rise in savings from households.
Meanwhile, the growth of bank credit slowed during this period.
Rising financial liabilities was one of the reasons for net savings to decline to its lowest level in decades in FY23.
Crisil further noted that a rise in residential sales and a slowdown in private consumption also indicate a move towards household savings.
“CRISIL MI&A Research finds that for a sample of the top 10 cities, retail residential real estate sales grew 9% between fiscals 2021 and 2022 and picked up to ~20% on average during FY23 and FY24,” it said.
Earlier this
