Affluent consumption may slow as hiring weakens, says BNP Paribas

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Hiring in IT and financial services has remained subdued for two years, slowing affluent consumption growth, according to BNP Paribas’ head of India equity research, Kunal Vora. Wage growth among NSE 500 companies has halved to about 7 per cent in FY25-26, from 14-15 per cent two years earlier. IT firms have stopped hiring at previous levels, annual recruitment of 4-5 lakh people is now near zero, while financial institutions and government hiring have also softened.

However, mass consumption is improving. GST cuts on automobiles, lower interest rates, gold loan growth and welfare schemes are supporting lower-income households. Vora expects affluent consumption to moderate further in the second half of FY27 as one-off benefits like tax cuts annualise. He noted that while rising construction and manufacturing are creating jobs at the lower end, white-collar job creation remains weak, and artificial intelligence poses a bigger risk to high-income roles.