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4w ago

India’s Household Savings Drop to 18.1% of GDP Even as Economy Expands 6.5%

Household borrowing has nearly doubled over the past decade, underscoring growing reliance on credit

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Overview

  • India’s economy grew 6.5% in FY25, driven by a 7.4% expansion in Q4 that outpaced earlier growth phases
  • Household savings fell to 18.1% of GDP in FY24, marking the third consecutive year of decline according to CareEdge Ratings
  • Household financial liabilities climbed to 6.2% of GDP, reflecting increased consumer borrowing amid savings pressures
  • Rural consumer confidence hovered around neutrality thanks to wage growth outpacing inflation and favourable agricultural prospects
  • The Reserve Bank of India cut its repo rate by 50 basis points to 5.25% to support demand recovery as urban sentiment remained subdued