BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
After double-digit average growth in H1 CY21, rural consumption finally lost steam last quarter, declining 2.4% YoY in Q3 CY21/Q2 FY22.
As many as seven of the 11 indicators used to determine the trends in rural consumption contracted in Q2 FY22, with double-digit growth in only one indicator – farm credit.
The deterioration in farm terms of trade (with rising input costs and weak output inflation) is the worst in the past quarter of a century.
In contrast, urban consumption grew 9.5% YoY in Q2 FY22, partly offsetting the losses seen in H1 FY21. All seven indicators posted better growth in Q2 FY22 vis-a-vis Q2 FY21, largely supported by the base effect.
Overall, after growing at an average of 6% in FY20/FY21, rural consumption grew 1.6% YoY in H1 FY22. In comparison, urban consumption grew at a strong 16% YoY following average decline of 1.1% in the previous two years.
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