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Jewellery consumption will increase in the current financial year, agency increases estimate by 12 per cent
Rating agency ICRA has increased the estimate of jewellery consumption to 10-12 per cent based on value. The consumption of jewellery is estimated to increase by more than 15 per cent in the first half - increased prices increased the revenue of jewellery sellers. High prices are hindering demand. The revenue of jewellers in the market may expand by 15-18 per cent in the current financial year.
In value terms, jewellery consumption is expected to grow by 10-12 per cent in the current financial year. The main reason for this is the increase in gold prices. Rating agency ICRA has raised its forecast for year-on-year domestic jewellery consumption growth (in value terms) to 10-12 per cent in FY 2023-24 from 8-10.
It is estimated that in the first half of the financial year 2023-24, jewellery consumption will increase by more than 15 per cent on an annual basis. The rating agency also believes that due to continued sluggish rural demand amid inflation, the growth rate of jewellery consumption will decline to 6-8 per cent in the second half of the next financial year.
The report said that sharp fluctuations were recorded in gold prices between December 2022 and April 2023, whereas gold prices remained relatively stable in the first half of the current financial year. However, when compared to the year-ago period, prices are 14 per cent higher. The report said that due to the increased prices, the revenue of jewellery sellers has increased.
Due to ongoing tensions in West Asia and free trade agreements with other countries, gold prices will remain high in the near term. The report said that rising gold prices and continuously increasing inflation from the beginning of October 2023 are emerging as disruptions to demand.
