Net households financial assets @ 8.3% of GDP in Q2, 2017-18
An RBI study on the quarterly estimates of households’ financial assets and liabilities for the period Q1:2015- 16 to Q2:2017-18, using flow of funds approach and based on information available in financial statements of counterparty sectors, show some interesting observations. Indian households are generally net savers and suppliers of financial resources for the rest of the economy. However, net financial assets of the households turned negative (-7.3% of gross domestic product) in the third quarter of 2016-17, reflecting the transitory effects of demonetization. With subsequent re-monetization, the household sector’s net financial assets turned around and in the fourth quarter they amounted to 14.8% of GDP. In 2017-18, net financial assets of households are estimated at 8.3% of GDP in Q2, up from 5.8% of GDP in Q1.
The study says the quarterly rate of net financial assets displays a high degree of volatility, revealing the shifts in preferences of households for the various instruments on both the assets and liabilities side, which usually does not get captured in annual data.