India's FMCG sector, which recorded a muted growth, is planning a healthy revival due to drop in inflation, said Nielsen India.
"The inflation in the country has fallen to single digit from double-digit it used to be until sometime back. This has paved the way for the revival of the FMCG sector," said Piyush Mathur, President, Nielsen India Region.
The growth in fast moving consumer goods sector was a tepid 7 per cent in 2014, a steep decline from 18-19 per cent recorded in 2010-11.
The sector has now entered the revival mode due to the falling price rate. Mathur said this at unveiling the consumer confidence index (CCI) findings by Nielsen India for Q4 2014.
"The FMCG sector is coming back slowly. The volume growth story will come back because of lower inflation in the next couple of years. And we hope that growth in the FMCG sector will be 10 per cent during the current calendar year and 12 per cent in 2016,” Mathur added.
The sense of uncertainty prevailing among consumers during the past few years was responsible for the muted growth in the key segment, the firm added.
"For the last couple of years, we had a bit of double whammy where consumers were concerned about their job prospects. People were not sure of the economy versus high inflation,” said Mathur.
The report also mentioned that the growth will be faster in the rural areas as compared to urban during the months to come.
The consumer confidence in urban parts rose to a score of 129 in Q4 2014 - a 14 point increase from 115 reported in the corresponding period of the last year. This was despite a 2 per cent fall at global level in the CCI, the report said.
In an online survey conducted between 10 -28th November 2014, over four in five (82%) urban Indian respondents indicated the highest level of optimism globally on job prospects in the next 12 months, followed by Indonesia (73%) and Philippines (73%), the report mentioned.
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