Shiv Sharma, Principal at Kanvic Consulting, shared his perspective on how higher interest rates could affect festive spending in a recent Mint feature. The article looks at how festive demand is shaping up as Diwali approaches, pointing to rising inflation putting a pressure on consumer goods companies, with a chance of further price increases. While everyday essentials and packaged food are holding up well, big-ticket purchases such as cars, homes and some consumer durables face more uncertainty.
“Rising rates increase EMI costs and make credit-dependent consumers more careful, especially for consumer durables. As a result, buyers may delay upgrades, move to more affordable models or rely more on discounts, particularly for high-ticket products”, said Shiv. The final impact will depend on how quickly higher policy rates feed into retail lending rates, he further added.
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