homeeconomy NewsBrent to move back to $90/bbl range; consumer sentiment not looking buoyant: Experts
Brent to move back to $90/bbl range; consumer sentiment not looking buoyant: Experts
The Russia-Ukraine war has taken a toll on commodity prices. At the heart of it lies crude prices, which has shot up and is currently trading at $110 per barrel. To discuss, how the commodities will react and how India will be impacted in the larger scheme of things, CNBC-TV18 spoke to Pranjul Bhandari, Chief India Economist, Chief India Economist, HSBC, and David Lennox of Fat Prophets.
The Russia-Ukraine war has taken a toll on commodity prices. At the heart of it lies crude prices, which has shot up and is currently trading at $110 per barrel. To discuss, how the commodities will react and how India will be impacted in the larger scheme of things, CNBC-TV18 spoke to Pranjul Bhandari, Chief India Economist, HSBC, and David Lennox of Fat Prophets.
Lennox expects Brent to move back to the $90 per barrel range, going ahead. He highlighted that commodity prices will continue their upward trajectory and a rise in prices will be seen across the board. Additionally, he pointed out that demand is building up for base metals and they are performing well.
He said, “We continue to see base metals performing well. The demand that we have seen building up across the globe because of infrastructure spending that is now in the real economy – that’s not going to go away and of course, with the Russian-Ukrainian war, we cannot see that coming off. So, we do expect to see commodity prices moving higher across the board.”
Bhandari highlighted that India’s industrial growth was weaker than expected and what can be a worrisome situation is when pent-up demand for services runs its course. She further cautioned that both consumption and consumer sentiment are not looking buoyant over the next year.
She said, “My worry is - what happens when pent-up demand for services runs its course? Will it continue to remain as exuberant? Because what we saw last year was that once pent-up demand for goods ran its course then it stagnated. What if after a few quarters' pent-up services runs its course as well and the data I look to on that front are the RBI consumer surveys and the one year ahead consumption sentiments, and earnings sentiment of consumers are not looking very buoyant and that is the part that keeps me worried about future growth.”
Bhandari believes H2 will come with its fair share of questions. Accordingly, a fall in demand is likely to impact the fortunes of bigger companies, going ahead. She said that the underlying cause for eroding appetite for private capex is the volatile commodity prices. However, owing to the pent-up demand, the next 2 quarters could prove to be promising.
For the entire discussion, watch the accompanying video
(Edited by : Dipikka Ghosh)
First Published: Mar 2, 2022 3:05 PM IST
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