India to emerge as third largest consumer market by 2026: Report
economy is expected to emerge as the world's third largest consumer market by 2026. In 2023, India’s consumption grew at a faster pace than that of China, US and Germany. But consumption growth lagged investment growth, post pandemic since mid-2022, said a report by UBS Securities.
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“India remains one of the fastest growing economies and the fifth largest consumer market in the world. India's household consumption nearly doubled in the past decade to $2.1trn in 2023, with an annual compound growth rate of 7.2%, higher than China, the US and Germany” said a report by UBS Securities titled “ India's consumption story- the big divide” by Tanvee Gupta Jain.
«India's consumption story reflects a significant divide, driven by a resilient economy but characterized by a stark contrast in spending patterns” Jain said. “Despite India's trajectory to become the world's third largest consumer market by 2026, the divergence between affluent and broad-based household demand persists, accentuated by factors such as income inequality, increased consumer credit access, and declining household savings. Consequently, we anticipate household consumption growth in FY25/26E to remain subdued at 4-5% year-on-year, below the trend observed in previous years,» the report said.
Although broad household consumption growth remained muted in the last two years, affluent Indian consumer demand significantly increased, the report said. India is expected to outpace Germany (in 2024)
