Indian savers change direction

Indian's are changing their pattern of savings that might effect the financial of the country.

Tradition saving patterns were putting the money away in banks or scoieties but the boom in other investments saw the country's citizens moving into more risky investments.

Now with those in decline,Indians are reverting to their old ways of saving.The consequences being taht there is less availability of capital and puttng the financial sector under pressure.

According to the Economist

India's high savings rate has been a crucial driver of its economic boom, providing productive capital and helping to fuel a virtuous cycle of higher growth, higher income and higher savings. Since the 1990s, the gross domestic savings rate has risen steadily from an average of 23% to an estimated high of 35% in the 2006/07 fiscal year (April-March). The latter rate compares very favourably not only with developed economies (the US and the UK have savings rates of around 14%), but also with other emerging economies—with a few exceptions such as Malaysia (38%) and Chile (35%).

Problems loom for the IPOD generation

Generation IPOD has had a uniquely gilded life with high expectations of future wages, financial security and consumer goods. Following in the footsteps of their baby-boomer parents and lacking the good housekeeping of older generations, they have continued to party long past 1999. However, in the process of this acquisition they have run up huge credit card bills, smashed their piggy banks and are now staring at a broken housing ladder.

That is the finding of the Reform think tank

Quite frightening as we enter a recession.The summary says that that half have debts of up to £10,000 and the same proportion that has no debt owes over £10,000.As far as savings are concerned one third have none at all.

One this means as we hit hard times is far from clear but without the cushion of continuing growth,one wonders how this generation is going to cope.