FMCG sector aims double digit growth

The fast moving consumer goods (FMCG) sector is expected to achieve double digit growth in the current year, though the growth is likely to be lower than that of the previous year. The growth in the previous year was benefited from the overall health of the economy and lower inflation rate.

FMCG industry is expected to grow between 11 and 12 per cent in 2019, stated a study by market research firm Nielsen. This growth rate is a little lower than the 13.8 per cent growth attained in 2018. The growth in the current year will be primarily on the back of conducive macroeconomic environment, rural consumption, sustained benefits of GST regime and the impact of general election.

The agency's projections suggest that the first half of the year (January to June) will have a decent double-digit growth, while the industry's growth in the second half will be taper down to high single digits. Similar growth will be witnessed across the group of product categories viz Food, Personal Care & Home Care, the report stated. However, GDP is expected to be buoyant at 7.5 per cent in 2019, Consumer Price Inflation (CPI) estimates for the year suggest that it will gradually increase. However, it will be within5 per cent.

Crude prices:

Crude prices in the global markets and exchange rates would be the factors to watch out for. The agency expects that the sustained government focus on rural infrastructure and surging non-farm income in rural areas will support rural FMCG consumption story. Consumption growth last year was on account of favourable macros like growth in GDP, lower inflation and manufacturers passing on the benefits of margin expansion from the GST regime.