Revenge-spending Indians drank and dined after being cooped up in covid years

livemint.com:

NEW DELHI : Indians spent liberally on dining at hotels and restaurants and on alcohol in 2022-23 while going easy on clothing, food and non-alcoholic beverages, clearly marking out their preferences emerging from two years of pandemic lockdowns. Growth in private final consumption expenditure on food and non-alcoholic beverages slowed to 6.2% in FY23 from 6.6% in the year before, show the government’s PFCE data released on Thursday. Private final consumption expenditure is defined as the expenditure incurred by households on final consumption of goods and services, and is reflective of the broader household demand in the country.

The data reveal divergence in household consumption trends that companies have been highlighting in recent quarters—wherein consumers have been prioritizing spending on experiences over products. Besides, high inflation has crimped demand for mass-market products. “The consumption data released by the government corroborates the sluggishness of the (fast-moving consumer goods) sector in comparison to the GDP growth," said K.

Ramakrishnan, managing director, south Asia, Kantar Worldpanel. “Expenditure on components such as education, health and even restaurants and recreation has far outpaced FMCG growth, indicating that the private consumption expenditure is going towards components other than foods, beverages and household related categories," he said. The PFCE-GDP ratio at current prices slipped to 60.9% in FY23 from 61.0% in the year before, and is expected to drop further to 60.3% in the ongoing financial year.