Domestic gold jewellery consumption to grow 14-18% in current fiscal in value terms: ICRA
ICRA in its latest report has said that the domestic gold jewellery consumption in value terms is expected to continue its growth momentum in the current financial year and is likely to witness an on-year rise of 14-18 per cent. It said gold jewellery consumption growth had witnessed a growth of 18 per cent in 2023-24, primarily driven by realisations even as volume growth was subdued.
According to the report, while gold prices were volatile, improving consumer sentiments and festive-led demand aided consumption growth in the recent months. Moreover, it stated a sharp 900 bps cut in import duty in the Union Budget in July 2024, and consequent correction in gold prices for a brief period led to some pre-buying of jewellery as well as bars and coins during the second quarter of FY25, which is generally a seasonally weak quarter. This, coupled with higher number of auspicious and wedding days, and favourable monsoons aiding better rural output, is likely to help jewellery demand growth in H2 FY25.
ICRA Vice President and Sector Head - Corporate Ratings, Sujoy Saha said ‘The organised market is projected to record a healthy YoY expansion of 18-20 per cent in FY25. Planned store additions with focus on tier II and III cities, rising gold prices, shift in preferences towards branded jewellery and some likely pre-buying in the fourth quarter of FY25 on account of higher number of auspicious days in the first quarter of FY26 shall drive growth. The customs duty cut is also expected to disincentive unofficial imports, thus supporting the growth in organised trade.’
