Household debt forms 37.6% of GDP for the year 2023

Financial liabilities rose by 2% in comparison to the previous year

Household savings have dropped from Rs 16.96 trillion in 2022 to Rs 13.76 trillion for the year 2023

The financial year 2023 saw a rise in household debt from 36.9% of the Gross Domestic Product (GDP) in the year 2022 to 37.6%. The household savings dropped from Rs 16.96 trillion in the year 2022 to Rs 13.76 trillion in the year 2023. This marks a drop in percentage of GDP from 7.2% in the year 2022 to 5.1% in the year 2023. This marks a 50 year low. 

Financial liabilities rose by 2% in comparison to the previous year. It formed 3.8% of the GDP in the year 2022 whereas for the year 2023 it was 5.8%. This indicates a rise in loan borrowing tendencies. These loans include housing loans as well as personal loans. During 2021, which saw the repercussions of the pandemic, there was a significant trend in the reduction of consumption by households. 

“We believe that consumption growth is unsustainable. Whether it will be substituted by investments is not our base case, though the jury is still out,” said Nikhil Gupta of Motilal Oswal as per a report in the Tribune. 

“Already, we find that rural indicators such as real rural wages and non-durables consumption, are weakening,” HSBC India economist Pranjul Bhandari stated recently as per a report in the Financial Express .