Gold jewellery demand to decline 35% in FY21: Icra

Gold jewellery demand is expected to contract by 35 per cent in volume terms this fiscal, hit by the coronavirus pandemic and high prices, according to a report. The demand is likely to see a rebound in the second half of this financial year after a poor performance in the first two quarters, ratings agency Icra said.

“Changed consumer social distancing habits and limitations on social events will slacken the pace of recovery. We maintain a negative outlook on the gold jewellery retail industry, considering the over 35 per cent volume contraction likely in FY21,” Icra Vice President K Srikumar said.

Gold jewellery demand fell sharply by 41 per cent during the fourth quarter of FY20, affected by the lockdown in the critical last two weeks of March.

This was further widened by the country-wide shutdown of retail stores during the first few months of the current fiscal, Srikumar observed.