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Private final consumption expenditure (PFCE) UPSC NOTE

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  Potential Challenges to India's Economic Growth Due to Waning Urban Consumption Urban consumption is slowing down , impacting overall ...

 Potential Challenges to India's Economic Growth Due to Waning Urban Consumption

  • Urban consumption is slowing down, impacting overall economic growth.

  • Private final consumption expenditure (PFCE) grew only 4%, the weakest since 2002-03 (excluding COVID-19 year).

  • Elevated interest rates are reducing urban consumer spending capacity.

  • Surveys indicate declining confidence among urban consumers regarding current and future spending.

  • A drop in passenger vehicle sales signals reduced urban demand.

  • Persistently high food inflation limits discretionary spending, affecting overall consumption.

  • Weak consumption can stall private investments, hindering job creation and economic growth.

Private Final Consumption Expenditure (PFCE)

  • PFCE measures expenditure incurred on the final consumption of goods and services by the resident households and non-profit institutions serving households.

  • It reflects consumer spending behavior, crucial for assessing economic health.

  • Components: Includes spending on durable goods (e.g., cars), non-durable goods (e.g., food), and services (e.g., healthcare).

  • A key driver of GDP, indicating the level of demand in the economy.


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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Private final consumption expenditure (PFCE) UPSC NOTE
Private final consumption expenditure (PFCE) UPSC NOTE
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Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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