With strong economic growth and consumer spending, India could represent the best hope for many retailers in the next decade, says Ira Kalish, Deloitte Global Research Director. “I’m cautiously optimistic about India. It has tightened monetary policy and good demographics, so it’s possible India could grow more than China in the next decade,” said Kalish addressing the delegates at the World Retail Congress being held in Berlin. He added that hopes for increased foreign investment in India in the future also add to the optimism.
He further said: "European retailers increasingly need to look outside their country for growth prospects because of poor growth and a loss of competitiveness in the UK and Europe following this summer’s Eurozone crisis."
Speaking on the occasion, he called the situation in Europe “deeply troubling,” although he does not think that Europe is yet at the stage of a double dip. Short-term growth scenario appears relatively non-existent, and looking ahead at the future Kalish foresees recession.
For a wider economy, especially the US, Kalish believes that slow growth will continue until the private sector has completed its period of deleveraging. However, a positive sign is that consumers are still out in the market and spending money despite confidence being at an all time low.
China presents a more troubled picture as its inflation has increased massively and growth coming from investment is now representative of half the GDP for the country. Consumer spending on the other hand accounts for just 35 percent. Looking ahead, privatization of state-run companies and less investment in property will help rebalance the state of play. An understanding that Chinese government is also considering the one-child policy will also help.
-IndiaRetailing Bureau
