Net household savings rebound: RBI

Financial savings of household sector

- MANOJIT SAHA

India's household financial savings rebounded to 5.1 per cent of gross national disposable income (GNDI) in 2023-24, according to the Reserve Bank of India's (RBI's) annual report for 2024-25, after falling to a multi-year low the previous year. The rebound comes amid a favourable economic outlook and moderating inflation. The report exuded confidence that retail inflation will align with the RBI's 4 per cent target over a 12-month horizon.

"The benign inflation outlook and moderate growth warrant monetary policy to be growth-supportive while remaining watchful about the rapidly evolving global macroeconomic conditions," the RBI annual report said.

Gross domestic savings, as a share of GNDI, held steady at 30.3 per cent in 2023-24, largely due to a decline in the general government's "dissaving". At the same time, household gross financial savings rose to 11.2 per cent of GNDI, up from 10.7 per cent in 2022-23; liabilities increased to 6.1 per cent. As a result, net household financial savings improved to 5.1 per cent from 4.9 per cent.