Consumption slowdown is positive as it isn't growing via debt, says Prashant Jain of 3P Investment Managers

Prashant Jain, founder and CIO at 3P Investment Managers

A slowdown in consumption currently is a positive trend as it is sustainable and not growing via debt, said Prashant Jain, founder and chief investment officer at 3P Investment Managers, in a conversation with Moneycontrol. 

"Whenever consumption is supported by rising leverage, it means one is preponing consumption and consumption is growing ahead of income levels which will lead to a moderation in demand," said Jain.

Jain said that the Reserve Bank of India (RBI) has been actively working to curb growth in unsecured retail loans.

Watch full interview here 

In November last year, RBI has flagged certain concerns on excessive growth in the unsecured retail loans and over-reliance of NBFCs on bank funding.

Jain pointed out that ramping up India’s manufacturing exports will be challenging due to a global economic slowdown and increased surplus capacity from China. "This could lead to some moderation in specific areas of the Indian economy, but there’s no reason to be pessimistic," he added.

He also observed a shift in consumer priorities. "People are prioritising air travel, dining out, high-end gadgets, and vacations over staples and four-wheelers," he said, highlighting a trend toward 'downtrading' in essential goods like soaps, shampoos, and even car purchases.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.