With bitter experience of slowdown still etched in their memory, and expecting Reserve Bank of India (RBI) to hike interest rates in early 2010, cautious Indian consumers are refusing to loosen their purse strings. Unsure of the pace of economic growth and stock market movements, consumers are seen favouring fixed deposits to equity to park their funds.
The Boston Analytics report, based on a survey of approximately 10,000 respondents in 15 cities and towns, said that 80 per cent of Indian consumers are not willing to reduce their rate of savings over the next 12 months, expecting interest rate hike. Forty-five per cent respondents said they will increase saving, while 35 per cent were in favour keeping it the same.
Consumers are also favouring secure instruments such as fixed deposits as well as Unit Linked Insurance Plans (ULIPs) to park their savings.