NEW DELHI: The country’s top fast-moving consumer goods (FMCG) player, ITC Ltd, has said that owing to steep inflation, consumption of FMCG products remained subdued, especially in rural India.
“With steep inflation impinging upon household budgets, consumption demand remained subdued, especially in rural markets and for certain discretionary categories in urban markets. Input costs remained elevated, even as certain commodities witnessed sequential moderation in prices towards the latter half of the year,” said the Kolkata-based conglomerate in its FY22-23 Annual Report released on Tuesday.
Besides FMCG products, ITC’s personal care products also faced inflationary pressure. In the many months of FY23, consumer inflation remained high and outside the Reserve Bank of India (RBI)’s comfort zone of below 6%. The RBI had last month made a slight downward revision to its inflation forecast for FY2023-24, lowering it by 10 basis points to 5.1%.
ITC said that even as inflation is projected to soften on an overall basis, prices of certain industry-specific commodities are expected to remain elevated with continued geopolitical issues and supply chain disruptions.
“The year is also expected to witness ‘El Nino’ weather phenomenon after three consecutive ‘La Nina’ years; the impact of this on monsoon, along with related events like heatwaves, spatial and temporal rainfall distribution etc. will remain a key monitorable for agri output, inflation and consumer demand in 2023,” the company said. It added that a good Rabi harvest, broad-based credit growth and Government’s thrust on capital spending to bolster investment activity supported by buoyant tax collections, augur well for the economy going forward.