Nielsen has slashed its growth forecast for the FMCG sector in the country and expects it to be nearly flat in the range of 1 per cent to -1 per cent for the full year 2020. The markets research and insights firm had in April said it expected the FMCG value growth to be in the range of 5-6 per cent for the calendar year.

In the April-June period (Q2), the FMCG sector’s value growth declined by about 17 per cent, due to the strict lockdown imposed to curb the spread of Covid-19 pandemic adversely impacted supply chain and consumer demand, it added.

While in the April-May period, value growth for the sector was down by 27.7 per cent, as the country gradually began unlocking economic activities in June, the FMCG sector saw some recovery with a value growth of about 4.5 per cent. The insights firm said that this was fuelled by recovery in rural demand and added that growth in rural markets outpaced urban markets.

Nielsen expects consumer spends in the second half of the year to revive due to the festival season besides other macro-economic factors such as good monsoon. However, this will also depend on Covid-19 infection cases and the strategy the country adops in further unlocking of economic activities.

“We expect to see some recovery in the July-December period.We are expecting to see some growth in Q3 but we expect to see even better growth in Q4 due to the festival season.” said Prasun Basu, South Asia Zone President, Nielsen Connect

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