Household Financial Savings Drop For Second Straight Quarter, Debt Mounts: RBI Data
Indian household savings fell for the second straight quarter, accompanied with a rising indebtedness.
Household financial savings rate dropped to 8.2% of GDP in the three months ended December 2020 from 10.4% in the preceding quarter, according to preliminary estimates published by the Reserve Bank of India. Household savings, however, had spiked in the April-June 2020 period because of precautionary holdings.
The moderation was driven by a significant weakening in the flow of household financial assets. The ratio of household bank deposits to GDP declined to 3% in Q3FY21 from 7.7% in the previous three-month period.
Household debt-to-GDP ratio, based on select financial instruments, has been rising steadily since March 2019-end.
Household liabilities from commercial banks rose to 27% of the GDP in the third quarter of FY21 from 26.3% in the previous three months. Liabilities from non-bank financial companies and housing finance companies remained steady.