Growth opportunities: India’s household savings could channel $9.5 trillion into financial assets over next decade, says Goldman Sachs report

India’s household savings are set to generate cumulative inflows of nearly $9.5 trillion into financial assets over the next decade, according to a report by Goldman Sachs. The investment bank forecasts that household financial savings will average around 13 percent of GDP over the next decade, up from 11.6 percent in the previous ten years.“India’s household financial savings to average around 13 per cent of GDP over the next ten years as a base-case (vs. average 11.6 per cent of GDP observed in the previous ten years),” the report said according to an ANI report, noting that the shift reflects a growing preference among Indian households to move away from traditional physical assets like gold and real estate towards financial instruments.A large share of these inflows, over $4 trillion, is expected to go into long-term savings products such as insurance, pensions, and retirement funds. Bank deposits are projected to attract about $3.5 trillion, while equities and mutual funds may see inflows of around $0.8 trillion.The report observed that such patterns mirror those seen in advanced economies where rising incomes and deeper financial systems have driven households to allocate more towards pension funds, insurance, and capital markets.Whereas in emerging economies, much of household savings is directed to physical assets.The report highlighted three key implications for India’s economy. First, a rise in household financial savings will create a steady source of funds for corporate investment without greatly affecting the current account deficit.Secondly, it is expected to strengthen the long-duration bond market, helping to anchor sovereign yields and potentially paving the way for longer-tenure corporate and quasi-sovereign bonds to support infrastructure financing.Third, rising financial savings will likely expand retail participation in capital markets and bolster the demand for professional wealth management services.The shift will reportedly depend on factors such as inflation, income growth, risk appetite, interest rates, and accessibility of financial markets.Government data shows the Indian economy grew 6.5 percent in real terms in FY25, showing resilience despite household financial pressures, while the move toward financial savings points to strong growth opportunities.