Households postpone purchase of consumer durables amid third wave fears

With the resurgence of the Covid-19 pandemic, households have postponed their purchase of consumer durable items once again and the outlook in the year 2022 looks bleak once again.

A survey of about 47,000 households in 39 districts has found reveals one in seven families are likely to spend on residential property in 2022 and one in six on four-wheelers, the latest survey by LocalCircles, a community platform, has found.

High inflation and inflationary expectations may also have postponed their spending on valuables.

The survey found that only one in seven households were likely to spend on gold, diamond, silver or multiple types of jewellery this year.

Also read: Economic indicators show robust rebound

Low-interest rates and the 25% rise in stock market indices in 2021 have led to increased confidence in equities and mutual fund investments with two in five families keen to invest in equities or mutual funds in 2022, the survey results showed.

Meanwhile, the first and second Covid wave experiences have also given a push for health insurance and many have purchased new policies in 2020 or 2021. The study finds that one in six families will take additional coverage in 2022 as an Omicron-led third wave now looks imminent.

“While the two Covid waves in 2020 and 2021 impacted livelihoods and earnings for many, the economic rebound in India has been strong, especially post the 2nd wave. This has led to a rise in optimism amongst a set of consumers believing that even if an Omicron-led third wave impacts India, it will cause 1-2 months of disruption followed by revival,” said Sachin Taparia, Founder of LocalCircles.

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